Category: Resources

Property development is a business with high risks, low recurring income, and a long-term vision. However, it can also be one of the most lucrative businesses you can start in your niche market. In this article, we cover everything you need to know about starting a property development business. We’ll discuss the risks and rewards of property development, as well as tips on how to build financial capital through your venture.

What is property development?

Property development involves the process of transforming buildings or land into a useable asset, which can generate revenue. This can range from creating a new commercial building to building a block of flats to improving an existing one. A property developer is an individual/limited company that builds properties / buys buildings, then leases the space to tenants, who can use the buildings for commercial purposes as well, such as retail stores. An asset developer turns derelict structures into income-generating asset.

How to start a property development business

Before you dive into the world of property development, it’s important to first understand the risks of the business. Once you understand the rewards, you’ll be better equipped to navigate the waters. For new real estate developers, the most important thing to understand is the industry’s overall economic outlook from a reliable source such as Office for National Statistics.

The risks of property development

Real estate development is an extremely risky business. The income from this type of investment is often low due to the current tax legislation and the income can fluctuate greatly from year to year. Real estate development also takes a long time to pay back. This means that there’s a high potential for the business to fail, meaning that you won’t see any return on your investment. One of the biggest risks of any real estate venture is when a new developer buys a portfolio of distressed properties. As the economy continues to recover, some of these properties will be improved, generating income and paying back investors. However, others may remain in a state of disrepair, increasing the risk of these properties being foreclosed. Foreclosed properties are often difficult to sell, thus leading to a low return on your investment.

The rewards of property development

The good news is real estate development has a low failure rate, making it a long-term investment. There are typically very few expenses involved in property development, which means that income is almost guaranteed. Real estate development also offers a wide range of investors to choose from. This means that you’re likely to find a high-net-worth individual interested in investing in your projects or a suitable lender who is happy to invest in your projects. Real estate development also has the ability to generate a high return for your investment, as high as 80% or more. You can earn a high rate of return by investing in large, reputable real estate development companies with long track records of success. Real estate development is also a field that offers great job security and stability. Because real estate is one of the few industries that’s expected to grow in the coming years, there are plenty of opportunities for employment.

How to build financial capital for your new business venture

– Create an investment plan:

A financial plan can help investors better understand the return on their investment and reduce the risk of real estate development.

– Invest in a reputable area property:

For best results, it’s important to invest in a reputable real estate area. A reputable area has a track record of success and has proven that it can generate a return on equity.

– Keep costs low:

The more money you put into a real estate development venture, the less likely it is to pay back. When determining the amount you’re willing to invest, ensure that it’s a small percentage of your overall net worth.

– Hire a property manager:

A property manager can help ensure that your investment is managed properly and that expenses are kept to a minimum.

– Invest in tax Deductible Properties:

There are a variety of tax-deductible property investment options available. This means that you can reduce your overall tax liability and increase your return on investment.

– Invest in a mix of property types:

Real estate development requires a mix of different types of property, to ensure that it continues to generate income. It’s important to investigate potential investment properties and ensure that they’re located in high-demand areas.

– Invest in quality construction:

It’s important to invest in quality construction to ensure that your investment property has a long life and pays a high rate of return.

– Learn from your mistakes:

Each property development venture is unique, which means that you can’t learn from previous ventures. Invest in a venture, learn from your mistakes and move on to the next investment opportunity.

Final Words: Should you invest in real estate?

Real estate development is a high-risk business, with a low profit potential. However, it also offers high rates of return and great capital security. Real estate development also has low startup costs and is expected to grow in the coming years, making it a lucrative business. Real estate development is a great business to invest in, especially if you have a large amount of financial capital. However, if you’re just starting out and don’t have much money to invest, you may want to consider other business ventures, such as opening a business opportunity or joint venture with other investors.

Also, try not to get over-excited. Real estate development is a business, not a get-rich-quick scheme. If you choose to go into this industry, make sure that you treat it as your career, and not as a chance to strike it rich in three months.

 

We are here to help:

We specialise in the Real Estate and property industries. We can assist you with all facets of this sector and offer guidance depending on your specific situation. Please schedule a free consultation with us.

Accounting can be an extremely complex and time-consuming task for businesses operating in a digital marketplace. However, it’s also one of the most important functions a tech company can outsource. Outsourcing your accounting functions enables you to focus on the tasks that are more beneficial to your business. It may sound like a scary proposition, but there are plenty of benefits to outsourcing your accounting functions. If you’re currently struggling to manage your books because you’re juggling several roles (and hats) as the chief accountant at your business, read on for some tips on how technology companies can benefit from outsourced accounting functions.

Outsourced Accounting Can Help You Focus On What Matters Most

Accounting is an essential function for any business, but when it’s done internally, it takes a lot of time, energy, and resources away from the core functions of the business. If you’re dealing with complex bookkeeping and accounting tasks, you’ll find that these slow down your business, while also creating an additional workload for you and the rest of your team. You’ll have to find time to train new hires in accounting and bookkeeping, which can be time-consuming and costly for businesses that are growing quickly. If you outsource all or part of your accounting functions, you can focus on the things that matter most to growing your business, like marketing, sales, product development, and other core functions. Outsourcing your accounting also means that you can scale your business quickly without needing to hire more staff.

Outsourced Bookkeeping Services Are Key For Growth

When your business is growing by leaps and bounds, keeping track of your finances can be a real challenge. At this point, you may be considering outsourcing some of the accounting functions, like your bookkeeping. Bookkeeping is an essential part of managing your business’ finances. This includes tracking your revenue and expenses, as well as the health of your business with financial ratios like profit margin, cash flow, and return on investment (ROI). Bookkeeping is also the record keeping process of tracking, documenting, analyzing and interpreting financial transactions. A bookkeeper or accountant keeps track of the financial transactions in a company or organization by using specialized software or manual systems. Our cloud-based bookkeeping services help to smooth line your business.

Automated Accounting Is The Way Forward

If you’re outsourcing your accounting functions, you should be looking for a partner that offers automated accounting. When outsourcing your accounting functions, you want to find a company that offers automated accounting. This means that your company will integrate with your chosen finance partner’s platform, so you can easily track and manage your company’s finances. Automated accounting saves businesses valuable time and resources. When you’re working with a platform that’s integrated with your accounting software, you’ll be able to see your numbers in real-time. Therefore, you can react to any issues promptly and effectively. Because you’ll be working with an automated accounting platform, you won’t have to worry about the security of your data. The platform will be highly secure, and the only people who will have access to your financials are the finance team at your company. This means that you can focus on growing your business without worrying about potential data breaches while we use our cloud accounting solutions for your business.

Automated Payroll and Pension

If you’re outsourcing your payroll functions, you should be looking for a partner that offers automated payroll. This means that you’ll be able to set up your payroll with your finance partner in a few simple steps. You’ll be able to select the deductions and pay rates for each employee, as well as set up your payroll tax payments. Once you’ve completed your payroll setup, the finance partner will take care of the rest. This means that you can focus on growing your business, while your finance partner takes care of the administrative parts of payroll, such as reporting, paying into pensions, and managing your employees’ tax and National Insurance contributions. Automated payroll is an essential function for growing companies as it makes managing payroll simpler. It can help you avoid mistakes, as well as reduce the risk of penalties and fines that can come with managing payroll manually.

Outsourced Tax Services Will Save You Money

If you’re outsourcing your tax functions to an accounting firm, you’ll be able to take advantage of their expertise in this area. Your accounting partner will be able to take care of your company’s tax obligations, such as its VAT, payroll taxes, and corporation taxes. In the UK, for example, it would be a good idea to outsource your VAT accounting functions. This is because there’s a lot of paperwork involved in VAT accounting, as well as calculating the correct amount of VAT to pay. Your finance partner will be able to take care of these tasks for you. We are online tax accountants and help clients using cloud accounting

Conclusion

The benefits of outsourcing your accounting functions are endless. Outsourcing allows you to focus on growing your business, while also ensuring that you’re able to meet your tax obligations. In addition to the benefits above, outsourcing your accounting functions allows you to hire the best talent for the job. You can hire accounting firms that specialize in your industry, so you can take advantage of their experience and expertise. In the long run, outsourcing your accounting functions is a great investment. It can save you money, while also allowing you to take advantage of expert advice and expertise in your industry.

Next Step:

If you are looking to know more please feel free to Book a free consultation now.

We are Chartered Certified Accountants based in Gants Hill Ilford. And are committed to helping small businesses achieve growth. And keep on top of their finances and compliance. We work with small businesses across a wide range of sectors in London and the surrounding areas.

Also manage the entire financial system including HMRC compliance. For small business accounting services across a wide range of industries.

We can adapt to the needs of our clients and offer personalised tax advice. There is a misconception that switching accountants can be a headache. We can ensure that we have processes in place. That make this transition seamless without any loss of accounting data.

Speak to us today to find out more!

 

Challenges of small businesses:

• When it comes to running a business finance, it can take up a lot of time, which is where small business accounting can help.
• Our services for small businesses can handle everything from bookkeeping to the creation and analysis of valuable financial reports, as well as tax advisory & tax compliance.
• We advise small business on how they could automate their business processes so that their costs could be reduced, and efficiency and profits could be increased.

 

Where small businesses need help:

You clearly desire precise accounting that matches your needs. You may. But, expect a lot more from us. We’re here to assist you and your company in growing and becoming more lucrative.

Whether you’re a new setup looking for help with your bookkeeping. Or an established company requiring support with your annual accounts. These tasks are the beginning for us. We work hard to comprehend your business and establish a close working relationship. In which we can provide long-term value for your business.

We do not provide one size fits all services. All the advice we give you tailored to your individual objectives, and we’re quick to discover. Other areas of expertise, such as Corporation Tax planning, where you can benefit.

We’re in business to be the best at what we do, like you. You must bookkeeping, VAT help, and payroll services from a motivated team. Unlike traditional accountants, we pride ourselves on being unique, dynamic, and trustworthy. With one eye on the latest developments in our profession and, more, yours. We are small business accountants with extensive experience.

From data entry to a completely outsourced finance service, small business owners. Have the option of cherry-picking the services they need.

 

Apex Accountants:

Allow Apex Accountants to manage your accounting if you’re like many business owners. Who don’t have the time or knowledge to do it yourself. Our all-in-one small business accounting services designed to make the process easier. For you and provide you with the tools. And information you need to make informed financial decisions.

The time you’ll save by hiring an accountant is priceless. And you’ll enjoy the peace of mind that comes with their expertise. Trust our experts to handle all elements of finance. And accounting, ensuring that everything done on time and accurately.

We provide cloud based bookkeeping service where you could access your financial records and information 24/7 from anywhere in the world. We are helping small businesses for a long time now.

Also provide advice on how to grow sales and your business for small businesses.

As small business accountants in Ilford, we are committed to ensuring that our customers have access to latest technology that will enable them to compete on a national level and make informed decisions. This is due to our opinion that cloud accounting may help you run your business more efficiently and profitably, as well as external pressure from the government’s Making Tax Digital (MTD) programme.

 

If you need to understand more about our services, feel free to contact us!

The tax benefits of electric vehicles:

The government is willing to promote the use of electric cars to help environment.

The tax regime for cars is designed to encourage the use of low emission vehicles.

What are the tax benefits and is now the time to consider the move to zero or low-emission vehicles?

What are the different types of taxes and relief involved?

 

Government grants(electric vehicles):

Government grants(electric vehicles)

For cars, the grant covers 35% of the buy price (including VAT and delivery fees), up to a most of £2,500 provided the vehicles:

• Cost less than £35,000;
• Have CO2 emissions of less than 50g/km and be able to travel at least 112km (70 miles) without any emissions at all.

Under the scheme, consumers pay the discounted price. And do not have to go through a separate application process. Only dealers and manufacturers need to access. The portal to apply for the grants available.

The government’s plug-in car grant designed to promote the uptake of electric vehicles in the UK.

Grant for Small vans is £3,000 (less than 2,500 kg gross vehicle weight). And for large vans £6,000 (between 2,500 kg and 3,500 kg gross vehicle weight).

 

P11D/Class 1A National Insurance:

Class 1A National Insurance levied. Where an employee uses the electric car owned by the limited company.

The percentage of the price of a company car. Which taxed as a benefit for employee determined by the CO2 emissions of the vehicle.

For the last year, low emission cars (up to 50g/km) were taxed at 16% of the price, or 20% for diesels.

There have been significant reductions in this charge from April 2020. With cars falling to 0% in 2020-21 as well as reductions for electric hybrids depending on their range.

 

Salary sacrifice:

What is Salary Sacrifice

A salary sacrifice arrangement is an agreement to reduce an employee’s entitlement. To cash pay, usually in return for a non-cash benefit (for example Pension contribution). As an employer, you can set up a salary sacrifice arrangement. By changing the terms of your employee’s employment contract.

Where an employee has a car provided under salary sacrifice. The benefit valued as the higher of the amount of salary given up or the taxable benefit.

Yet, the optional payment rules do not apply if the company car has CO2 emissions of less than 75g/km.

 

Electric vans:

The taxable benefit for having the private use of a zero-emission van reduces from April 2021 to nil.

Please note that for non-electric vans there is no taxable benefit at all. If the van is only used for business journeys. And ordinary commuting, irrespective of fuel type.

 

Electric Bikes:

We have to distinguish here what is a “bicycle”and what is an “Electric Motor and a Motorbike”.

There are different rules for both.

Electric Bicycle cannot have a motor-powered top speed excess of 15.5 mph. And the electric motor must be less than 250 watts in power.

Anything above these criteria would be classed as a motorbike.

 

Why is this important?

An electric bicycle will still qualify for the Cycle to Work Scheme. So can provided without a P11D benefit in kind arising for an employee.

There are no specific tax advantages for an electric motorcycle, and these taxed. Under general use of asset rules in the same way as their petrol-powered equivalents.

 

Vehicle Excise Duty:

The road tax, or Vehicle Excise Duty (VED). Rates for all pure-electric vehicles have reduced to £0 until at least 2025.

There are reduced Vehicle Excise Duty (VED ) rates for plug-in hybrid electric vehicles (PHEVs).

 

Capital allowances:

From 6 April 2020, businesses can claim 100% of the cost of an electric vehicle. Against the profits of the year of buy and there are no restrictions on the value of the vehicle.

Capital allowances

Electric cars qualify for the new super-deduction, which offers 130% first-year allowance. On qualifying electric charging points for cars and vans.

To qualify for the relief the company must use the charging point within their own business. This relief will last until 31 March 2023.

 

From 1 April 2021, pure zero emission car can qualify for a 100% first year allowance (FYA) for the new cars only.

A similar 100% FYA applies for zero emission vans. Where the vehicle is purchased new before 1 April 2021.

Commercial vehicles already qualified for 100% relief under the Annual Investment Allowance.

Cars with CO2 emissions not exceeding 50g/km will be part of the main pool. For capital allowance purposes, so attracting a writing down allowance (WDA) of 18%. Cars with CO2  emissions exceeding 50g/km must allocated to the special rate pool, where the WDA is 6%.

 

Electric bikes will also qualify for the Annual Investment Allowance.

 

Electric charge points and charging costs:

Where the business installs charging points for electric vehicles. Up to 31 March 2023, it can claim a 100% FYA for those costs.

 

Employee charging their electric vehicle:

From 6 April 2018, where the company allows employees to charge. Their own electric vehicles at the workplace. There is no taxable benefit for the provision of that free electricity for the employee.

For this tax exemption to apply, the charging facilities must be provided at or near the workplace.

This tax exemption does not apply if the employer reimburses the costs of charging. The employee’s own vehicle away from the workplace.

 

Employer paying cost of charging for the company owned car:

Where the employer pays for the cost of charging the company-provided electric vehicle there is no taxable fuel benefit for the driver, as electricity is not classified as a fuel for the car or van benefit regulations.

 

VAT:

An electric vehicle will still be viewed as a car for VAT purposes. Therefore, VAT is not recoverable on purchase, unless it can be demonstrated that the car is only available and used solely for business purposes. In practice this is very difficult to achieve in most of the cases.

The same VAT recovery rules also apply for leasing purposes with 50% VAT recovery on the leasing charge available.

 

Privately owned electric cars:

Where the employee uses his / her own electric car for business journeys, the company can pay the normal tax-free mileage allowance to the individual of 45p per mile for the first 10,000 miles driven in the year, with additional business miles reimbursed at 25p per mile.

Where the employee owns or leases the electric car, they will be entitled to a grant under the Electric Vehicle Homecharge Scheme. This grant covers a 75% contribution towards the cost of one charge point and its installation, up to a maximum of £350 (including VAT) per household.

 

What is VAT:

VAT is acronym for Value Added Tax applied on purchase rate of taxable supplies and services.

Value added tax (VAT) is a type of indirect tax levied on goods and services for value added at every point of production or distribution cycle, starting from raw materials, and going all the way to the final retail purchase.

 

Why we pay VAT:

The main aim behind the introduction of VAT was to eliminate the presence of double taxation and the cascading effect from the then existing sales tax structure.

 

Why Knowing about VAT is important?

We have only covered a brief overview of VAT basic rules. You might need an expert who can provide you VAT Advice Services, VAT tax returns, payments, and penalties.

The rules for VAT are extremely complex and a business should establish the clauses applicable to them, this is to ensure they pay the correct VAT. This would also result in ensuring that businesses claim all the relevant reliefs available. This is worth mentioning that there are higher penalties for not complying to Value Added Tax Act 1994.

 

 

What are the current Rates of VAT:

There are 3 different rates for VAT depending upon the nature of goods and services:

• Standard rate: 20% applies to most goods and services
• Reduced rate: 5% applies to good and services like home energy, domestic fuel, children’s car seats, residential property conversions, mobility aids for older people
• Zero rate: The goods and services under zero rate pay no VAT but are still under VAT regulation. Most foods, books and newspapers, children’s clothing, export from Northern Ireland to outside the EU and the UK get a 0% charge.

Exemptions:

Some goods and services are exempt from VAT which means one does not need to pay VAT on these.

The following are some of the items falling in the exemption list:

• Insurance, finance, and credit
• education and training services
• fundraising events by charities
• subscriptions to membership organizations

 

 

Partly exempt business:

There is another category which partially exempts businesses from VAT.

A business is partly exempt if they incur VAT on purchases that relate to exempt supplies.

We offer accounting services to small businesses in Ilford.

 

Current threshold to register for VAT:

If your taxable goods or services’ turnover exceed from £85,000 then you must register for VAT. The taxable turnover is the turnover generated from sales that are not exempt from VAT, even the goods or services with zero VAT rate is also considered in taxable turnover.

 

Registered late by	Penalty
not more than 9 months late	5%
more than 9 months but not more than 18 months late	10%
more than 18 months late.	15%

There is a minimum penalty of £50.

 

Filing VAT return and paying:

Normally you must file your Vat return and pay your VAT at the end of each quarter, however HMRC may ask to file VAT return and pay for each month.

There is a penalty regime for late filing and payment of VAT.

We are tax accountants in East London that provides professional advice for tax filing.

 

Place of supply for services:

It is extremely important to consider about the place of supply because VAT is charged from the place of the supply.

 

VAT after Brexit:

The situation of VAT treatment has changed after Brexit and this has become more complex issue now.

 

VAT on good to/ from Northern Ireland:

There are sperate set of rules for good supplied from Northern Ireland and vice Vera after Brexit.

 

VAT Advice:

We provide VAT advice services as part of our Tax Planning service to various types of businesses for example, online trader, Consultants, retailers, manufacturing businesses. Our regular support ensures businesses don’t fall into HMRC investigation.

However, if your business is under HMRC investigation, we could help to reduce your stress.

 

We are here to help!

Please feel free to contact us for a no obligation consultation.

 

Keeping Adequate Accounting Records  is really important and a legal requirement for businesses to keep their records for a period of 6 years from the end of the last company financial year they relate to.

HMRC suggests that companies should keep records of all money received and spent, including grants and payments from coronavirus support schemes.

https://www.gov.uk/running-a-limited-company/company-and-accounting-records#:~:text=You%20must%20keep%20records%20for,years%2C%20like%20equipment%20or%20machinery

The Insolvency Service recently conducted an investigation, leading to the imprisonment of the sole director of a Leicester clothing manufacturer for six months. This occurred due to their failure to provide adequate company accounting records.

https://www.gov.uk/government/news/clothing-boss-jailed-for-failing-to-keep-adequate-accounts

 

In addition, the company failed to pay tax liabilities of more than £300,000. The director was found to be taking contributions from employees without passing on National Insurance and PAYE payments, which partly explains the situation.

In addition to the prison sentence, the court has banned the defendant from acting as a company director for five years. This disqualification prohibits the director from participating, directly or indirectly, in the formation, promotion, or management of a company without court permission for the specified period.

This case serves as an important reminder that a company director must ensure that they meet their responsibilities. Directors are duty-bound to keep adequate records to demonstrate their company’s financial position and to prepare accounts.

 

If you are looking to know more and see how we could help, feel free to book a free consultation with us.

.Greening Of Scotch Whisky

Needless to say, the greening does not refer to the colour of whisky.

The Green agenda has received endorsement from Scotland’s world famous distilleries who are aiming to cut their emissions by almost half a million tons of CO2 every year.

The new Green Distilling Fund, announced in the March 2020 budget, facilitated the achievement.

Greening distillery operations in Scotland and across the rest of the UK will help contribute towards its legally-binding target of reaching net-zero emissions by 2050. The funding comes as the UK government continues to ramp up its green economic recovery from Coronavirus ahead of hosting the UN Climate Change talks (COP26) in November next year.

For example, from September, a New Green Homes Grant will provide vouchers worth up to £5,000 towards. The cost of energy efficient is used for  improvements for homeowners in England.

If you’re a homeowner or residential landlord you can use a Green Homes Grant voucher. It will be towards the cost of installing energy efficient improvements to your home.