FreeAgent Update - Release Comte
New this week - internal changes and bug fixes, plus much-requested additions to support buying The Big Stuff.
Capital Purchases - New Asset List, Out-of-Pocket Asset Purchases
A little while back we introduced Capital Asset Purchase as an explanation type, and took account of Depreciation (or at least, Capital Allowances) in your Profit and Loss Account. What did that last sentence mean? Well, if you buy something Big (like a shiny new MacBook Pro) which is going to last a little while, you can't just claim it as an expense against tax all in one go. Oh no. But you can claim it over a number of years - so-called Capital Allowances - which take into account the depreciation of the thing.
All well and good. Finally, now you can see a list of those things your company owns which are treated like this: The Capital Assets page (under the Home tab). All those things are listed because you've explained some purchase or other as a Capital Asset Purchase. If you bought something before you started using FreeAgent, you can just add it as a manual bank entry on the appropriate purchase date, and it'll appear in the Capital Assets list as you might expect.
Even better, you can also categorise Out-of-Pocket Expenses as Capital Purchases. Just select 'Purchase of Capital Asset' from your usual list of Expense Types.
Flat Rate VAT Surplus
What Alistair Darling giveth with one hand...
The VAT Flat Rate Scheme is a pretty good deal for freelancers (but speak to your accountant before you sign up - don't just listen to us!). If you play your cards right, you might make a small profit on the deal. And there's the rub - the HMRC want you to work out that profit and declare it, and it's therefore subject to tax.
To cut a long story short, this is now done for you - you can see the results on the Profit and Loss page for any accounting year where you've been on the Flat Rate Scheme. One caveat - there's a tweak to do this week to reduce the surplus by the amount of un-reclaimed VAT on purchases - but we're nearly there.
You may also notice those purchases are now considered as VAT-inclusive when it comes to calculating your overheads, just as if you weren't VAT Registered. All part of the plan - see here for the HMRC's take. So it must be true.
- You deserve better: why you need to break up with your spreadsheet
- Simple ways to save yourself future Self Assessment stress
- Making Tax Digital consultation response published
- Not feeling (a) fine? You might have a ‘reasonable excuse’ for not completing your tax return
- Don’t be caught out by the Self Assessment deadline!