Outsourcing our bookkeeping and accounting was a good decision, but even better was outsourcing it to EJBC. They have been efficient, cost effective and flexible from day one, and we are very happy with the service that we receive.

Simon Nutbrown

I was introduced to EJBC by recommendation from a friend and have been with them two years now. I have always found them thorough, helpful and easy to deal with. They always respond quickly when I have a question, and the detail and clarity of the paperwork they have produced for me is a refreshing... Read More

Jeremy Porter

Starting a new business can feel a bit daunting but working with EJBC has been pain free from the beginning, enabling us to get on with building our business and delivering the work. In the beginning, as we got to grips with the practicalities of running the business we regularly rang Emma for... Read More

Angela Greenfield

Summer Statement

08/07/2020 – The Chancellor, Rishi Sunak continued with his campaign to support the business and jobs community today, 8 July 2020, … More...

Tax Credits updates required this month

07/07/2020 – Families and individuals that receive tax credits should ensure that they review their tax credit claims by 31 July … More...

Reminder of businesses opening since 4 July 2020

07/07/2020 – A reminder that since 4 July 2020, many business sectors have been given permission to reopen in England. The businesses … More...


Depreciation
29/06/2020

Literally, the word depreciation means a reduction in the value of an asset over time. It recognises the fact that if you buy assets for your business – cars, plant, computers etc – as time marches on the value of those assets will decrease.

In double entry bookkeeping terms, the value of an asset is reduced by the amount depreciated and charged against profits, like an expense.

Another way of looking at depreciation is that it accumulates an amount of profits to replace the asset when it eventually ceases to function. This is why accountants need to determine the useful life of an asset as this quantifies the annual rate of depreciation to charge against profits. A useful life of 10 years would require a rate of 10%, 4 years 25%.

Interestingly, HMRC will not accept depreciation as a valid deduction against your profits when working out how much tax you should pay. They insist that it is written back.

In its place, HMRC allow a deduction called a capital allowance. These range from 2% to 100% of the cost of qualifying assets purchased.

This substitution of depreciation with a capital allowance does present a problem. If you depreciate a plant by 10% a year, but in the first year HMRC allow you to write off the total cost, when you come to dispose of the asset any proceeds would possibly create a tax charge. This would happen because the full cost had been allowed as a deduction when the assets was purchased.

It is worth keeping a record of your business assets to compare the original cost with current valuations (what the assets could be expected to fetch if sold second-hand), and comparing these figures with the written down values in your accounts and the tax written down values as far as HMRC are concerned.

In this way you can see how decisions to replace assets will affect your profits and tax payments.


Accounts

We specialise in preparing end of year statutory accounts for your business, in line with HM Revenue & Customs legislation:

Sole Traders & Partnerships
Limited Companies
Limited Liability Partnerships
Property Management Companies
Property rental income accounts

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Bookkeeping

We can adivise on the best bookkeeping options for your needs and budget, if you would prefer to do the bookkeeping yourself.

There are a number of excellent options including Sage desktop software and market leading online solutions, such as Kashflow & Xero.

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Payroll

ejbc payroll

We can set-up and run your payroll scheme or advise on:

Setting up a new payroll system
Day to day payroll processing
Dealing with PAYE and NI deductions
Completing your end of year returns
Holiday & Statutory pay
Stakeholder pensions

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Start Ups

Starting a Business is an exciting opportunity but at the same time can be daunting.

Why not let us take some of the stress away. We are on hand from the outset to help you through many of the challenges of getting your business up and running successfully.

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Contact Us

The Rectory, 1 Toomers Wharf, Canal Walk
Newbury
Berkshire
RG14 1DY
Phone: 01635 46174
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