Lucy Birchall, our trainee accountant, says…

Drinks, fun, laughter, entertainment …

Things that all come to mind when running and owning a Pub?

Well, whether you are planning on, already have your own, or have great envisions of having exciting football games on your big plasma screens with everyone cheering and drinking; this blog will hopefully help you with a few main points you may not have thought about.

Pub Insurance

Pub insurance is a special type of business insurance that is specially created for the risks that pubs may face. Your insurance will need to cover some main things as follows; loss of licence, damage to fixed glass fittings, loss of money and theft and claims from your employees. As an Employer you are also required by law to take out Employers Liability Insurance; this is sometimes included in the Pub insurance policy.

Be sure you have the correct covers on your Insurance!

Machine Game Duty (MGD)

Did you know you’ll need to register for MGD and pay the duty if your hold a certain type of licence/permit.

For example, Premises Licence for gambling activities under the Gambling Act 2005, Club Gaming permits and Prize Gaming permits.

It’s quick and easy to register online and all you’ll need to do once you have registered is keep good records of the money being played on the machines.

The MGD will then need to be paid on the total net takings from the machine.

Net takings means what is charged to play the games less the amount paid out as winnings.

Alcohol Licence

Before pulling the pint you need to make sure you have an Alcohol Licence in place. It’s straight forward to apply by filling in an application form and sending it onto your local Council. Some Councils are now accepting online applications to make the process quicker.

Why not make a toast to being much clearer on a few things you may not have thought about when owning a Pub. If you have any queries or need more advise, just get in touch!

Ian Sergeant, our staff accountant, says…

During September we are focusing on a different industry each week, hopefully giving some helpful hints and tips of things you will need to think about if you operate in this sector.

This week, we will be looking at the construction industry.

The construction industry is seen as a specialised area by HM Revenue & Customs therefore people and businesses working within the construction industry have to adhere to slightly different rules when it comes to paying employees and subcontractors.

The construction industry scheme is wide ranging and covers all of the following business types:

self-employed individuals working as sole traders

• partnerships
• companies
• limited liability partnerships

The types of jobs that are usually involved within the scheme are things along the lines of:

• site preparation
• general construction – bricklaying, roofing, plastering and so on
• alterations and extensions
• repairs and refurbishment
• decorating
• dismantling work
• demolition

As a subcontractor working within the scheme you have the following responsibilities:

• ensuring you are registered with HM Revenue & Customs as a subcontractor under CIS, HM Revenue & Customs will then issue you with a CIS card with your Unique Taxpayer Reference on and this should be shown to all contractors you work for
• you must ensure that you inform the contractor you work for the correct basis on which to deduct tax from yourself, either gross (no deduction), 20% or 30% deductions
• it is your responsibility to keep a record of your tax vouchers you receive from your contractors in order to complete your yearend tax return or accounts
• if you operate a payroll scheme you need to inform HM Revenue & Customs in real time of deductions being suffered through CIS.

As a contractor it is your responsibility for the following:

• ensuring you are registered with HM Revenue and Customs as a contractor under CIS
• filing monthly returns with details of all subcontractors used in the month, together with the amounts paid to them and tax deducted
• you must verify the basis of tax deduction your subcontractor has told you

In addition employers within the Construction Industry Scheme have to be aware of is the Construction Industry Training Board Levy (CITB Levy).  This is a Levy collected from larger employers within the scheme, the money collected is then used to provide training grants and other services that support the UK construction industry.  All construction employers are required to complete a levy form by law.  If your total wage bill for the year is above £80,000 then a levy will have to be paid based upon 0.5% of your total PAYE for the year and 1.5% of the total labour only subcontractor payments in the year.  If your total wage bill for the year is between £80,000 and £100,000 then a small business levy reduction claim can be made.

If you require further information about the Construction Industry Scheme, then just let us know.

Amy Sharples, our staff accountant, says…

Catering Industry

September will see RT’s blog focus on different industries each week, hopefully giving some helpful hints and tips of things you will need to think about if you operate in this sector.

This week, we will be looking at the catering industry.

Regulation

Catering businesses are highly regulated by the Food Standards Agency (FSA) who aims to enforce food safety regulations. Keeping in line with regulation can be costly for a new business, but is essential to avoid fines and to maintain a good reputation with customers and potential customers.

Some basic things that the FSA require new catering businesses to do are:

• Register your food business with the environmental health service
• Organise waste and recycling collection
• Get appropriate training and tools

Employees

The catering industry often attracts young employees who are likely to be paid minimum wage. The minimum wage is due to change on 1^st October 2014 and all employees have a duty to increase their employees’ wages to the following hourly rates:

• 21 and over – £6.50
• 18 to 21 – £5.13
• Under 18 – £3.72
• Apprentice – £2.68

If your catering business includes a bar, you cannot employ staff under the age of 18 during the times when the bar is open for the sale of alcohol. If you do, it is you that is breaking the law and not your employee.

Tips are often paid to workers in the catering industry. If your customers pay their tips directly to you by debit or credit card, and you decide to pass these tips onto your employees, it is your responsibility to collect tax through PAYE. If you influence how the tips are shared out, it will also be your responsibility to collect national insurance contributions through PAYE. However, if you have no say in how the tips are shared amongst your staff, national insurance is not due. Service charges are not considered to be tips. These should be treated as normal wages and should go through the PAYE system.

VAT

There are some specific VAT rules which only affect the catering industry.

Although food for human consumption is often zero-rated, food supplied in the course of catering should always be standard rated. Food is classified as being in the course of catering when:

• Food is served in a normal catering establishment such as a café or restaurant.
• You deliver food to a customer that is prepared and ready to eat, and you arrange it on a serving platter. (If you deliver food and don’t arrange it on a serving platter, you may not need to charge VAT).
• You serve hot take away food.
• You supply packed lunches as part of a coach trip or similar.

If you are unsure about the specific tax regulations that affect your industry, please get in touch to arrange a free initial meeting to see how we can help your business.

Michael Barton, our CEO, says…

VAT the best tax?

Best is a subjective concept rather than an objective concept like ‘fastest’, ‘heaviest’.  Let’s consider it from the various perspectives.

From HM Treasury point of view VAT is the third largest income generator at around £102bn pa (2012/2013) after income tax (£155bn) and NIC (£106bn). As virtually all the administration is done by taxpayers the collection and compliance checking costs are the lowest of the main taxes.

From the point of view of most businesses (the exception being the exempt businesses like insurance) they charge VAT on their sales and offset against the VAT element of what they spend. VAT has virtually no profit effect therefore and is just an administrative burden.  For most businesses the VAT element amounts to an interest free working capital loan from HMRC.

From the point of view of the consumer (who suffers virtually all the cost of VAT) it is often an invisible tax (who thinks about the VAT element of a cinema ticket?). It is also more or less optional: if you don’t want to pay the tax don’t buy the petrol, cinema ticket etc. VAT is not applied to most ESSENTIALS of day to day life, food, travel, housing costs etc. Having said it is also more or less impossible to avoid. The more you spend the more you pay so it is a progressive not regressive tax.

Having a VAT system is also a condition of admission to the EU but there are those who might argue that is a bad thing!

So: A huge income generator with low collection costs. Not generally a tax on business but on consumption which (unlike income tax & NIC) is more or less optional. What’s not to like? That is of course unless you subscribe to the school of thought that “All taxation is theft”!

Answers and comments please……