Finance and
Budgeting
Course Content
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Assessment
Incorporation
Bookkeeping
Cash Flow
Raising Finance
Tax and VAT
Social Currency
Assessment
• Research, Research, RESEARCH!
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Current Cash Position
Start up costs required
Running costs
Funding
Incorporation
• Companies Acts require accounts, in a specified format to be filed on
public record at Companies House every year
• Directors’ report
• Accountants’ report
• Profit and loss account
• Balance sheet
• Notes to the accounts
• Filing deadline is 9 months after year end
• Penalties for late filing
• Large companies must have accounts audited
Bookkeeping & Accounts
• It is essential to keep accurate records
• The purpose is to determine the success and financial health of a
business
• Basis of paying tax
• Bookkeeping needs to be set out clearly so you and the tax man can
understand it
• Don’t forget cash is everything
What needs to be recorded?
• Every penny that is received and paid by the business
• This includes all pre-trading expenses
• This also includes any non-business receipts or payments, because the
business books should ‘balance’ or ‘agree’ with the bank account.
• Money owed to the business (invoiced but not yet received)
• Money owed by the business (invoiced but not yet paid)
• Many small business owners remember the above, without needing
formal records!
Cash Book
Date
Customer
Amount
received
Cash sales
Cheque
Credit/ Bank pay-in
debit card amounts
Purchases and Expenses
Date
Supplier
Amount paid
Paid cash
Paid cheque
Paid credit/debit
card
Sales Ledger
Date
Invoice Customer
number
Net
VAT
Gross
Date
paid
Payment
type
Cash Flow
These are sales/costs broken down over a fix period of
time when they actually happen
• Pre-start costs
• Opening balance
• Money in
• Money out
• What’s left
• Carry it forward
• Real money in real time
Raising Finance
In the early stages of your enterprise you may need a little financial assistance,
where can you go?
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The Three Fs
The University
Kick Starters
Grants
Banks
Lenders of Last Resort
V.A.T.
Registration
• Compulsory if taxable supplies exceed £81,000
• Voluntary below the limit
• Keep track of rolling 12 months (or next 30 days!)
Penalties for late registration
Apply to Customs & Excise
• 08457 112114
• www.hmrc.gov.uk
Taxation (Income Tax)
Income
Income Tax rate
20014/15
Up to £10,000
0%
£10,001£41,865
20%
Over £41,866£150,000
40%
Over £150,000
45%
Taxation (National Insurance)
Class Paid by
On
Rate
1
Employees
Up to £7956
£7957 to £41,865
Over £41,865
Nil
12%
2%
1
Employers
Up to £7956
£7957 to £41,865
Over £41,865
Nil
13.8%
13.8%
Business Expenditure
• A business can incur any expenditure it thinks fit and proper
• Only expenditure which is ‘wholly and exclusively’ incurred for the
purpose of the business is allowable as a tax deduction
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Entertainment
Clothing (except safety/uniforms)
Subscription to Golf/Health Club
Formation costs of Ltd. Co.
Personal drawings (self employed)
Purchase of capital items
Social Currency
It is important for Social Enterprises and Charities to remain solvent.
However how are you going to measure your social purpose?
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Key social areas
SLAs and KPIs
Commercial vs Social
Never loose sight of why you are doing it
Useful Contacts
• ACCA (Association of Chartered Certified Accountants)
http://www.accaglobal.com/uk/en.html
• HMRC
www.gov.uk
• VAT Office
www.gov.uk/business-tax/vat
• Companies House
http://ow.ly/J7SyQ
• The Best Small Business Accounts Book - Peter Hingston
• Bookkeeping For Dummies - Jane Kelly, Paul Barrow , Lita Epstein
Banks are also a valuable source of help[ and advise.
What We Have Covered Today
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Assessment
Incorporation
Bookkeeping
Cash Flow
Raising Finance
Tax and VAT
Social Currency
Wed 18 March 2015 Managing Your Project
Any Questions?