Business news and opinion from Evans Weir > Category: SME Questions | Page 2

EBITDA or the shorter, EBIT or EBT, is a financial reporting term which identifies the profit generated from trading activities of an organisation. However, it is fundamentally different to Net Profit which states the profit left after all costs have been applied. The acronym in full is Earnings Before Interest, Taxation, Depreciation and Amortisation and whilst historically used within larger corporations, is now a relatively common reporting metric in management accounts for SMEs.

If you have responsibility for budgeting in your business, the events of the last couple of years will undoubtedly have kept you busy and will probably have thrown some challenges your way. You’re not alone. Businesses everywhere are struggling to set and maintain accurate budgets, beset on all sides by world events and economic trends.

So how do you budget effectively, and more to the point accurately, with so many external influences at play?

If you’re thinking of becoming self-employed, you may be weighing up the choice between incorporating a Limited Company or trading as a sole trader. One of the key things to consider is the amount of personal tax you’ll end up paying, how it is calculated and when you have to pay it. It is subtly different in each case and you also need to be aware of other taxes which apply.

Yes, a salary of 100k + does still put you in a relatively select group at the top of the UK earners list. Whilst those at the very top of that heap are touching seven-figure salaries, the proportion of those on more than £100k continues to grow.
But with a cost of living crisis, slow growth and record amounts of government borrowing needing to be paid back, if you’re earning £100k or more in the UK, you may find yourself in the spotlight if there are any changes to the income tax bands.

It’s a fair question, especially if you’re on a fixed salary. It would be easy to think that you should just receive a set amount each month based on the total salary, less tax, divided by 12 for monthly pay or 53 for weekly payrolls. But the way tax is calculated is not that straightforward and there are various factors which mean your salary will vary by month. Needless to say, the overall salary amount you get paid over the year evens out to that net figure but it won’t arrive in neat even chunks, and here’s why.

The simple answer to this question is yes, but as with anything accounting related it’s not entirely straightforward…

We’re asked this question a lot as these are two of the reports that form part of the regular management information used by most businesses. Whilst they both offer information about the financial performance of the business; they each tell a vastly different story.

Limited companies have always been a very tax efficient vehicle for companies and their Directors, but various changes in other taxes and allowances mean this may not continue to be the case.

As a business owner and/or company director, you have certain obligations around the proper collation and retention of company accounting records. Whilst HMRC and Companies House have changed their stance on digital copies compared to paper versions, the requirement to retain copies of key financial documentation remains.

Over twelve million people are now required to submit a tax return and with that number growing each year, more and more people are coming to the process for the first time. The rise in AirBnB lettings, self-employment, the ‘gig economy’ and people having multiple sources of income are the factors driving more taxpayers to self-assessment.

At a basic level, a cashflow statement details the movements of money in and out of a business over a defined period. The cashflow statement enables you to monitor bank balances, allocate reserves, manage investments and plan significant procurement.

When it comes to tax, you want to be paying as little as possible – tax that is. But for many, the cost of completing a tax return can feel like a tax in itself and you may be inclined to try and pay as little as possible. But is that a wise idea? Do […]