OUTSOURCE FD & FINANCE FUNCTION
We will become a key component of your company, allowing you to free up time to focus on the commercial aspects of your business whilst we take care and oversee the whole of the finance function.
We will spend the start of our relationship digitising your core accounting systems creating ‘automation’ with oversight taken care of by DIGI. This will then allow us, your ‘outsourced FD’ to really add value to your business.
As part of this service we can include items such as management accounts, cashflows and budgets.
We will also be available to attend monthly management/board meetings, this will allow us to go through the information provided giving you qualified advice on the financial performance of your business.
Modern companies of all sizes are learning that running their own finance function is not always the right option. The best finance departments demand a wide variety of skills and experience, from accounting and payroll professionals to tax specialists. Finding and keeping the right mix of professionals to ensure that your finance department runs smoothly is an expensive business.
Companies that outsource their finance function to DIGI are able to concentrate on the key areas of their business, safe in the knowledge that key financial tasks are in the hands of trained professional staff, leaving them to concentrate on their core business, at a much lower cost than hiring an internal finance department.
Whatever stage your business is at. There is always areas of accountancy which you must comply with.
DIGITAL COMPANY ACCOUNTS
Digital bookkeeping is thriving throughout the world, this allows us to generate and file digital accounts upon your company year end passing. Xero allows you to generate a ‘live’ picture of your accounts to date at any point throughout the financial year.
We don’t want to bore you but having live accounting data allows us to accurately provide a Corporation Tax figure at any point during the year, this will provide you with sufficient time to plan for any liabilities well in advance of any deadlines.
Personal tax returns and the tax payable will be mapped out from day one of the tax year so any liabilities can be planned for well in advance of the dreaded ’31 of January’ deadline.
Businesses with a taxable turnover of over £85,000 in a 12 month rolling period must register for VAT. There are VAT scheme options available to you if you turnover is under £150,000.
VAT can be difficult to understand and the regulations surrounding it are constantly changing. There are so many rules and exemptions which are often difficult to interpret if you are not from an accountancy background.
PAYROLL & PENSIONS
Payroll services are time-consuming yet a pivitol function of any business. We provide payroll & pension services to businesses of all sizes. There are many advantages to outsourcing payroll, such asnot having to train multiple staff on how to run a payroll and not having to pay for expensive payroll software.
TRANSITION TO XERO
We will transition you from your current software (desktop based, excel or a cloud software) to Xero, this will immediately give you the following benefits:
• Cheaper software fees
• Huge time savings
• Anytime, anywhere access
• The ability to add additional apps that will automate your finance function.
BUDGETS & FORECASTS
We generate budgets and forecasts through additional apps extended on to your accounting software, providing ‘forward looking’ information giving you the ability make informed financial decisions now for the future.
APP ADVISORY / BUILDING A CLOUD ACCOUNTING FUNCTION
Using Xero for bookkeeping and accounts is just the start. Xero integrates with hundreds of apps designed to meet specific business needs. Whatever sector you work in, there are apps to help you reduce cost, improve productivity and profitability.
Xero cloud accounting software provides flexibility and connectivity. Sitting at the centre of an app ecosystem, it offers solutions that can reduce your administration load, boost productivity and efficiency, and unlock the growth potential in your business.
Amongst the apps, there are those that solve common business problems – getting paid on time, managing customer information or providing real-time insights into business performance, for example. Others are focused on sector specific needs – such as systems for bookings, tills, or inventory management.
Learn more about how Xero can work for your business.
R&D & EMI SCHEMES
RESEARCH & DEVELOPMENT
One of our niche areas of advice is Research & Development tax credits. If you are already with us we will be on the look out for any areas within your business which may qualify for R&D tax relief.
R&D stands for ‘Research & Development’. It is the process of taking an idea and transforming it into a fully-fledged product or process. Researching, designing, creating and testing are all part of the R&D process.
R&D tax credits are a HMRC incentive designed to encourage innovation across multiple industries. This is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the costs your business dedicates to ‘Research & Development’.
Under the scheme, SME’s can claim back up to 33% of the costs associated with R&D. That’s 33p back for every £1 spent on qualifying R&D activities.
R&D can occur in businesses of all sectors and sizes. However, some of the sectors that most commonly conduct ‘Research & Development’ are IT/Software, Electrical Engineering, Manufacturing, Care, Food/Drink and Agriculture.
Most of these industries are unaware they are even conducting ‘Research & Development’. The definition of R&D is much broader than you think. Read our R&D tax relief blog post or contact us to find out more.
DIGI can help you creative an Enterprise Management Incentive scheme. An EMI scheme, is a government backed, tax advantageous share options scheme. It is mainly used by small to mid-sized UK businesses looking to share their successes with their team as their company grows.
An EMI allows you to reward, retain and motivate your employees with share options with have massive tax advantages, it also allows the company to offset both the cost of the scheme and the tax benefits achieved by your employees against your company’s tax liability. If you’re sharing ownership with your employees, an EMI share scheme makes a lot of sense because of its tax efficiency.
EMI options schemes are relatively flexible, in terms of both the conditions and the time frames that can be set as part of their terms. You have the ability to set conditions for recipients, including performance or length of service milestones.
The earlier you introduce this into your business, the better for all parties.
MEDICAL ACCOUNTING SPECIALISTS
DIGI is a cloud based accountancy practice with a key specialism in the medical and healthcare sector. We have the ability to become your dental accountant, medical accountant, doctor accountant and much more.
Our experience and knowledge enables us to assist the healthcare and medical sector, which includes:
• GP Practices
• Dental Practice
• Plus many more
BRINGING CLOUD ACCOUNTING TO THE MEDICAL INDUSTRY
At DIGI we have identified that many of those in the medical profession have not taken full advantage of the advancements in accountancy software which would massively benefit their businesses.
Our experience at DIGI means we can transform and digitalise your financial function from start to finish. We offer a full outsource finance function meaning you do not have to recruit in house, alternatively we can implement the new finance function and train your team.
This will not only provide savings in time and money, it will allow you to see real time information which will enable the decision makers to make informed financial decisions for the business.
• Initial practice set up on dental accounting software, doctor accounting software plus other medical accounting software.
• The creation of bespoke practice accounts
• Completion of tax and self-assessment returns
• Advise you on all your opportunities for tax relief
• Completion of superannuation certificates
• Staff training and development
• General advice on the NHS Pensions, personal pension and auto enrolment
• Retirement and succession planning
Corporation Tax, Income Tax or Capital Gains Tax
The taxation of profits from buying and selling cryptocurrencies is more than likely going to fall in to one of these areas. In deciding which one, HMRC have said this must be considered on a case by case basis. For an individual to be subject to Income Tax (or a company to be subject to Corporation Tax) on cryptocurrency gains, there needs to be evidence of a trading business. To decide if this is the case, HMRC say that badges of trade must be present.
Not all of these “badges” need to be present in order for a trade to exist. It’s only when you look at all the badges that are present in the context of the activity that you can decide if you are trading in cryptocurrencies or investing in them.
The biggest potential risk is that some people will make vast amounts of gains from cryptocurrencies, HMRC deem them to be trading, and end up being hit with the top rate of income tax on their earnings (currently 45% plus 2% National Insurance). At the highest rate of tax, individuals also lose their tax-free personal allowance.
For this reason, it’s worth looking at your activity now, assessing the likelihood of being deemed to be trading, and if you are, consider moving your cryptocurrencies into a Limited Company where lower overall rates of tax apply. If the profits are in a company, some effective tax planning can make sure you hold on to more of your gains.
For those that are investing in cryptocurrency, these gains will be subject to Capital Gains Tax (CGT). Every individual has an annual exemption of £12,300 (for 2021/22 tax year). Any gains over and above that amount will be taxed at either 10% or 20% depending on your other income in that same tax year.
In most circumstances CGT will be the main tax applicable to gains from cryptocurrency but it will really depend on each individuals own circumstances.
The buying and selling of Cryptocurrencies are outside the scope of VAT. But services connected with cryptocurrencies will be subject to VAT in the normal way. Examples include consultancy, settling debts with cryptocurrency, purchasing goods with cryptocurrency.
As would have been expected, the buying and selling of cryptocurrencies are outside the scope of VAT. Services provided connected with trading in crytpocurrencies, such as consultancy services, will be subject to VAT. HMRC also clarified that just because a transaction is settled in a cryptocurrency, this does not mean that the underlying supply is not subject to VAT. This means buying goods and services using Bitcoin, doesn’t mean VAT shouldn’t be charged in the normal way. As with any other transaction, the pound value is the equivalent of the market value of the cryptocurrency at the time of the transaction.
Transfer assets to your Spouse or Civil Partner
Transfer between spouses is currently exempt from CGT. This means that assets can be transferred between husband and wife or civil partners so that both annual CGT allowances are used. This effectively doubles the CGT allowance for married couples and civil partners. The transfer must be a genuine, outright gift.
Make use of losses
Gains and losses established in the same tax year must be offset against each other, so this will reduce the amount of gain that is subject to tax. Losses must be registered with HMRC within four years from the end of the tax year in which the loss has occurred. You’re allowed to deduct certain
costs involved with buying and selling (incidental costs of acquisition and disposal) Crypto Assets from your gain when working out your CGT liability. These include: transfer fee, exchange fees, and fees for professional service such as lawyers and accountants relating to the buying and selling the crypto.
HELPING SOURCE NEW TALENT
Finding new talent for your business is difficult and time consuming, especially for accounting staff. DIGI can help you find your next Finance Director, Credit Controller, Accountant, Purchase Ledger clerk and more. Whether you are another accountancy practice or your accounts department needs expanding.
This goes against our model of outsourcing your finance function, however, we appreciate that an outsource finance function does not suit every business, therefore with our knowledge and experience of the accountancy industry we can help you source the right individual for your business.
This can be a full recruitment process or less, such as sitting on the panel of interviewers.
Most recruiters charge in the region of 25% of first years salary without having any experience in the accountancy industry, our fees are lower yet we have the experience and the network to source the perfect individual for your business.