In today’s financial landscape, there is huge amounts of pressure put on people, especially young people, to increase their credit score. Whether you’re applying for a mortgage or seeking a business loan, your credit score will come into play. It’s essential to actively work on your credit score not, so that you access financial services stress free in the future. This week Baxterworld is sharing its credit score tips. Here’s some strategies to help boost your credit score.

 

1. Understanding Your Credit Report: The first step to improving your credit score is understanding where you currently stand. You should obtain a copy of your credit report and review it thoroughly. You should check for any errors that could be negatively affecting your score.

 

2. Making Timely Payments: Now you know where your credit score stands, you can make steps to improve it. You should ensure that you pay your bills, loans, and credit cards on time. Even a single missed payment can have detrimental effect on your score. Consider setting up automatic payments or even reminders, to stay on track.

 

3. Reduce Credit Card Balances: High credit card balances relative to your limit, can damage your credit score also. Try to keep your credit card balances relatively steady, ensuring you’re not spending too much, but spending enough to gain credit score.

 

4. Avoid Opening Too Many Accounts: Although it is tempting to open multiple credit accounts, and thus having more opportunities to improve credit score, it can be harmful. Each new account results in a hard enquiry on your credit report, which can lead to a lower score. Furthermore, having too many accounts can signal to lenders that you are overextended financially.

 

5. Diversify Your Credit Mix: Lenders like to see that you can responsibly manage different types of credit, such as credit cards, instalment loans and mortgages. Having a diverse mix of credit types can help improve your score but ensure that you can manage them responsibly.

To conclude, improving your credit score takes some work, both passive and active. By following these strategies and maintaining responsible financial habits, you can gradually elevate your credit score, opening doors to better borrowing terms and improved finances.

Given that the tax rules sometimes seem like one compliance hurdle after another, it’s good to know that some of them can be used to benefit your employees. The ‘trivial benefits’ rules are an example. Correctly applied, they allow a benefit costing not more than £50 (including VAT), to be given to an employee, free of both tax and National Insurance. Some employers give gift cards, others a bottle of wine: the morale boost is at your discretion. There is no limit to the number of times you can make a gift under the scheme, and no need to notify HMRC. There are, however, conditions to meet:

• The benefit must not be cash or a voucher that can be redeemed for cash.
• It must not be given as a reward linked to particular services or work performance.
• It must not form part of the terms of the worker’s contract, nor be part of a salary sacrifice arrangement.

Trivial benefits can also be used for the directors or office holders of close companies (one with five or fewer shareholders). There are special rules for such individuals, including a £300 cap on the total value of benefits that can be received in any one tax year.

Optional remuneration, often known as salary, sacrifice arrangements, can also help your employees. In outline, they mean that an employee’s remuneration is reduced in return for a specified non-cash benefit. These mainly comprise:

• Employer pension contributions to approved schemes.
• Pensions advice.
• Cycle to work schemes.
• Qualifying low emission cars and specific childcare provision.

The financial benefit to the employee comes because of a reduction in pay subject to Class 1 NICs; and certain exempt benefits, like pension contributions, can also result in savings for the employee and employer. Note, however, that the sacrifice should not take cash earnings below the relevant minimum wage rate.

Tax efficient remuneration

To draw money out of your company, you will have been advised in the past to pay part as salary and the remainder by way of a dividend.

Salary: Usually best set at a level high enough to qualify for State Pension but lower than the starting point for National Insurance. Remember that salary (and employer national insurance) is a deductible business expense for corporation tax purposes.

For 2023/24, the preferred salary in most cases will be £12,570, so that the standard personal allowance is fully used. This is also the starting point for the employee NI charge, although the employer contribution starts at £9,100. No tax or NI makes this the sweet spot.

Dividends: This method of remuneration is being squeezed by the Government. The Tax-Free Allowance on dividends has fallen over the last few years and the dividend tax rate has increased. In many cases however it may still be tax efficient to take profits as dividends rather than salary, the decision just requires more calculations.

Bonus: Another consideration is to extract profit as a bonus. This may be efficient if you are paying Corporation tax at the full 25% rate. Also, If there aren’t enough retained profits to allow under the required dividend to be legally paid, then it will be the only way to extract the money. The Chancellors reduction in National Insurance will make this a cheaper option.

The calculation: Four taxes need to be considered, Income Tax, Corporation Tax, Employers NI and Employees NI. Work out the best combination based on the amount you need to extract. Remember that higher payments via PAYE reduce CT.

Minimum Wage: Unless a director has a contract of employment there is no need to pay minimum wage rates.

Pension: If you can afford to put away money for the future then a contribution to a private pension will save tax.

In the modern landscape of UK businesses, staying competitive demands more than traditional bookkeeping methods. Cloud technology has revolutionised our approach to accounting practices, offering a wealth of new tools and benefits for businesses of all sizes. From streamlining procedures to enhancing accessibility, cloud-based accounting has become an indispensable industry standard. This week’s blog will delve into the key advantages of cloud accounting and show how they can be utilised by businesses within the UK.

                Firstly, cloud accounting offers unparalleled accessibility and flexibility. Digital data is stored securely in the cloud, meaning that businesses can access their information at any time, and any location, if they have an internet connection. This allows businesses to make informed decisions on the go, without being tied down to a physical location or device.Cloud accounting solutions also allows for real time collaboration. Multiple team-members can simultaneously access and update financial data, with any changes made occurring instantly. This allows for seamless work between accountants, finance teams, and other stakeholders. This real time collaboration is invaluable to teams large and small and ensures that everyone is working with up to date, and accurate information.

                Furthermore, the scalability of cloud accounting makes it ideal for businesses experiencing growth or fluctuating demand. For scaling businesses cloud accounting allows them to adapt to and accommodate to these changes. Furthermore, these changes can be done without any significant investment by the business into its infrastructure.Another benefit of cloud accounting is its increased security over traditional bookkeeping. Cloud accounting offers robust security measures to safeguard sensitive financial information. Leading cloud providers utilise advanced encryption techniques ad regularly update their security methods to protect data from cyber threats. Finally, cloud providers must ensure compliance with data protection regulations such as the GDPR, meaning their security systems are constantly monitored and inspected.Finally, cloud accounting solutions can often be integrated with other business tools and software. This flexibility offers seamless automation and workflow optimisation, from invoicing and expense tracking to payroll management and inventory control. This streamlining reduces manual errors, freeing up valuable time for businesses to focus on core operations and strategic initiatives.  

                To conclude, the benefits of cloud accounting solutions for UK businesses are clear. By leveraging its benefits, businesses can achieve greater efficiency, cohesiveness, and competitiveness in today’s dynamic landscape. Embracing cloud accounting is not just a trend; it’s an essential tool for businesses looking to thrive in the digital age.

Owning a home is a significant milestone for many in the UK, but with rising property prices and stagnant wages, achieving this goal for millennials can be daunting. However, with careful planning and a strategic approach, millennials can make their dreams of homeownership a reality. This week, we will be looking at these strategies, so read on for Baxterworld’s homeowning tips:

• Start Saving Early: When working towards buying your first home, saving up for a deposit is often the biggest obstacle. The key here is to start as early as possible. Set aside a portion of your income each month into a dedicated savings account. Consider taking advantage of government grants and schemes such as, “help to Buy ISA”, or “Lifetime ISA”, which both offer bonuses to first time buyers.

 

• Research Government Schemes: Be sure to familiarise yourself with the government schemes on off in the UK. These include the, Help to Buy Equity Loan, Shared Ownership, and the First Home Scheme. These provide financial assistance and make home ownership more accessible, especially for first buyers.

 

• Improve Your Credit Score: When seeking a mortgage, a good credit score is essential. Take steps to improve your credit score by paying your bills on time, paying off existing debt, and avoiding unnecessary credit applications. Keep track of your credit report regularly, address any errors promptly.

 

• Explore Alternative Financing Options: It is important to be aware of all your options when applying for a mortgage. Consider a guarantor mortgages or joint mortgages with a partner or a family member. These methods can help to boost your borrowing capacity or reduce the necessary deposit amount.

 

• Negotiate Wisely: When the time comes to make an offer on a property, it is vital to negotiate. Look at similar properties in the area and use their information to make an informed offer on your desired house. Be confident and don’t be afraid to negotiate on the price or request concessions such as covering closing costs.

 

By utilising these strategies and staying up to date on the latest developments in the housing market, millennials can drastically increase their chances of homeownership. With patience and careful financial planning, owning a home can become a reality for aspiring millennial homeowners.

In the face of an ongoing cost of living crisis, employees around the world are seeking new money saving methods. Baxterworld is here to help. This week, we’ll look at 4 different tax tips, specifically designed to help employees to save money.

Explore Tax Deductions:

Utilise tax deductions to reduce your taxable income. Common deductions such as work-related expenses, education costs, and charitable contributions are great examples. Keep detailed reports of your expenses and consider consulting a tax professional, to ensure you’re maximising your deductions.

Leverage Individual Savings Accounts (ISAs):

Individual Savings Accounts can be a great way to shield your savings from taxes. ISAs provide an efficient way to grow your savings and come cone in various forms including cash ISAs and stocks and shares ISAs.

Optimise Pension Contributions:

By maximising contributions to your pension, you not only secure your financial future, but also reduce your taxable income. Get to know the UK pension schemes such as workplace pensions and self-invested pensions.

Telecommuting Tax Benefits: If you’re working remotely, explore potential tax benefits related to telecommuting. The UK may provide allowances for home office expenses, internet bills, and other work-related costs incurred while working from home.

In times of economic struggle, it is essential that workers utilise all money saving methods and tax tips possible. Hopefully this guide has been helpful in explaining these methods and can offer some relief regarding the ongoing cost of living crisis.

 If you have any questions or queries on the topics covered today, feel free to contact us via our social media channels or website.

In business, the art of budgeting is a crucial skill for financial success. Well-structured budgets not only act as financial plans, but also provide a strategic framework for businesses to thrive. In this week’s blog we will delve into three key points regarding budget creation, specifically regarding the UK market.

Strategic Income Analysis:

In crafting a successful business budget, start with a careful examination of income sources. Evaluate all revenue streams, such as sales, investments, and grants. This strategic analysis forms the basis for well-informed financial decisions, enabling businesses to make accurate revenue projections and develop a dependable budget.

Distinction between Fixed and Variable Expenses:

“To achieve financial stability, it’s crucial to classify expenses as either fixed or variable. Fixed costs, like rent and utilities, create a stable foundation, while variable costs, such as marketing and supplies, allow for flexibility. This distinction helps businesses prioritize essential spending and allocate resources wisely, enabling strategic decisions aligned with financial goals.”

Proactive Adaptability and Contingency Planning:

Stay ahead in the unpredictable business environment by proactively planning for contingencies. Include buffer provisions in your budget to handle unforeseen challenges or leverage unexpected opportunities. This foresighted approach serves as a financial safety net, enabling businesses to navigate uncertainties and capitalize on emerging prospects. Regular reviews and adjustments underscore the importance of adaptability, keeping the budget dynamic and responsive for ongoing financial success.”

Through careful income analysis, recognizing fixed and variable expenses, and adopting proactive adaptability, UK businesses can create a budget that guides them through the financial landscape and drives sustained success. As businesses change, their budgets should evolve—a valuable companion on the path to financial prosperity.

In the bustling hospitality world, being eco-friendly is not just good for the planet—it’s a clever financial choice. This blog explores three simple strategies for businesses in hospitality to stay profitable while going green.

Balance Profit and Planet

Finding the right mix of making money and being eco-conscious is simpler than you think. Businesses can make choices that are good for the planet and their wallets. Simple decisions like sourcing locally and reducing waste can make a positive impact on both profits and the environment.

Save Money with Energy Efficiency

Going green isn’t just about being environmentally friendly; it’s also about saving money. Small changes, like using energy-efficient appliances or switching to LED lighting, can add up to significant savings on utility bills. It’s a win-win—good for the planet and good for the business budget.

Cut Costs by Reducing Waste

Beyond helping the environment, cutting down on waste can save businesses money. Easy steps like recycling, using less packaging, and reusing materials can lead to lower disposal costs and a more efficient operation. It’s a double win—saving money and being environmentally responsible.

Implementing these simple strategies doesn’t require complicated financial manoeuvres. It’s about making everyday choices that benefit both the business and the environment.

In the fast-paced hospitality world, making smart financial moves can be as simple as going green. By balancing profit and the planet, investing in energy efficiency, and reducing waste, businesses can create a sustainable and profitable future. It’s about making choices that are good for today and set the stage for a resilient and eco-friendly tomorrow in the hospitality industry.