Category Archives: News

Student Loans

As we set our first foot into the adult world of employment, some of us may have a student loan hanging over us.

The joy of securing employment and being able to afford to live, as opposed to existing just on beans on toast, becomes a pay cheque away. The hours of study are about to pay off…that is until the powers at be within the Student Loan headquarters says “well done on your new job, but as well as tax, national insurance and pension contributions, we also want our chunk to repay what we lent you!”
Then very soon, that pay cheque feels a lot less and exciting than you initially thought it would be.

There are two different types of plans when it comes to Student loans.

How the amount deducted is calculated depends on when you took the loan out.

Plan 1 is for:

• English and Welsh students who started before 1 September 2012
• all Scottish and Northern Irish students

You start repaying when you earn over £17,775. This amount changes on 6 April every year. If you earn less than this then you do not pay anything back.

Plan 2 is for:

• English and Welsh students who started on or after 1 September 2012.

You start repaying when you earn over £21,000, the same with plan 1 if you do not earn above 21,000 you do not start any repayments.

For those of us that are employees of a company the loan deduction will be taken out of our wages along with national insurance, tax etc.
It is important that you inform your employer what plan you are on. If you do not tell your employer you have a student loan, then the HMRC have a nifty way of finding out when/where and what you are earning, they will then get in touch with your employer to inform them what deductions to make.

For those of us that entered the world of self-employment, the way the repayments are made are slightly different. Once you have worked out your income and expenses for the year and submitted your tax return, the level of profits you have, based on the same levels set out above, will determine the amount of student loan you repay – which will be in addition to your tax and national insurance payments.

Example 1 Employed:-

• You are employed on a salary of £35,000 per annum,
• You have an outstanding student loan on plan 2.

You will pay 9% on the difference between £35,000 and £21,000. Therefore per year you will be paying £1260 against your student loan, this will be deducted from your wages at£105 per month.

Example 2 Self Employed:-

• You have earned an income of £28,000
• After expenses your net income is £22,500.
• The Student loan you have was taken out before September 2012 so you are on Plan one.
• You declare on your tax return that you have a Student loan on plan one.

The amount you would pay along with any tax due would be 9% on the difference between £22,500 and £17775, therefore an additional amount of £425.25 would be needed.
If you are self-employed, or have student loan things to remember…

• Keep your accountant updated as to what Student loan you have
• Keep a track on the outstanding balance:
o If it is will be paid off within two years, then you can request for a direct debit to be set up.
• You can make voluntary payments towards the balance
• Just because you are a director and receive dividends you are still liable for the loan repayment if you receive above the threshold
• If you are employed an d have unearned income over £2000 the loan deductions become active only if a tax return is required, if the tax is collected through your PAYE then the loan repayments will also be calculated this way
• There are various rules relating to working aboard, so always best to check when considering foreign jobs.
• Keep records to show what you have already paid
• Student loans will be written off after a period of time, though this all depends on when you took it our.
Further reading on interest rates and loan write offs can be found below. Also you sill see extracts of the key points available on these links:-

When are outstanding loans wiped?

(1) This is the age you were when your last agreement for a loan was made – usually your last year of study.

Interest charges on Student loans, the information below is sourced from
Undergraduate loans
Income Contingent Repayment for pre 2012 (Plan 1) loans

From 1 December 2017 until 31 August 2018, the interest rate set for the existing Income Contingent Repayment loans will be 1.5%.

Income Contingent Repayment Loans for post – 2012 – (Plan 2) loans
From 1 September 2017 until 31 August 2018 one or more interest rates may apply to you:

Postgraduate Loans (England and Wales)
From 1 September 2017 until 31 August 2018, the interest rate for borrowers in England and Wales taking out a Postgraduate Loan for a Master’s degree will be 6.1% (RPI + £3%).
These interest rates are still a lot lower than some credit companies, plus you have the added advantage on of only paying once you reach the threshold per plan.
If you need any further advice on the above feel free to give us a call where one of our friendly team members will be more than happy to help.



Remember if you get paid early in December try not to spend until the end of the month, you still have your January bills to cover.
• Some of us may have a Self Assessment Tax bill in the household as well looming (31st January is the dreaded date to pay your Self Assessment tax and any payment on account for the next year).
• If you have a Self Assessment bill you can have it added to next years PAYE code, as long as:
• You owe less than £3,000 on your tax bill;
• You already pay tax through PAYE (Ie you are an employee or you get a pension income etc);
• You submitted your paper tax return by 31 October or your online tax return by 31 December.

• Don’t forget those bills for Council Tax, Utility Bills, Rent / Mortgage, Maintenance, car running costs etc. See if you can switch any of these outgoings onto Direct Debit, to benefit from slightly lower monthly amounts, as well as spreading payments across the year to help cashflow.
• If you are falling behind on any bills then it is best to contact your provider and advise them of this, rather than have them send red bills or refer you to debt. Most companies if they know you are having difficulties will try and provide options to help you, so don’t be ashamed to ask for help.
• Clear down your Gift App, you can then start getting in the habit of using this through the year for birthdays and anniversaries, when you have or see a gift that would be an ideal present just add it.
• Remember whenever shopping online to go via your chosen Cashback site, be it for birthday presents, insurance, changing utility providers or mobiles, holidays, or even your weekly shop, there is cashback to be had on almost everything.
• Look at transferring any credit cards where you are paying interest to one that can offer you 0% over a few years, as the transfer fee may more than likely be considerably less than the monthly interest.
• Consider doing more shopping online including food shopping even if you have one delivery a month for large, heavier and non perishable items it could save you time and money.
• Open a new savings account and start putting something way each month towards next Christmas, to save money towards your presents, so that the shopping trip may actually turn out to be a fun day.
• Take advantage of January Sales, purchasing items in advance like wrapping paper, Christmas cards, decorations etc if they were on your desirable list this year. Why pay full price when you can save.
• Throughout the year try not to use any supermarket loyalty rewards each quarter. Save them all up to use in December, you will notice that one larger saving more than the smaller ones through the year.
• Add some dates to your diary:


– Write List of people you need to Buy Gifts for, setting a budget next to them all;
– Add items to a watch list as you may see some gifts reduced before you would normally start shopping, thereby spreading the cost of Christmas over a few months;
– You will be well prepared for events like Black Friday which now lasts many days.


– Write Christmas cards early, to post them all 2nd class at the beginning of December, or even get the opportunity to hand delivery some when catching up with people. Small wins soon add up.

We may be accountants and you may think of us as being Tax advisers – but here at Blue Skies we like to think you also see us as friends.

So if you need help because you may be struggling financially then give us a call. There may be things you want to plan for in the future, that we (being different to many other accountants) can help advise you going forwards. Planning for the future rather than just processing your receipts for the previous year.

Merry Christmas To You All!


With Christmas approaching, we should remember that this time of year can be stressful and expensive. So if you are worried about your cashflow and costs over the festive season then making a few simple changes can ease the burden and go some way towards making Christmas more enjoyable.

Don’t forget you can use the below suggestions to add diary dates to your calendar for 2018, to get ahead and help plan and improve your financial position this coming year – it is never too late to make changes.

• Make a list of who you are buying for, how much you are spending on each person and a choice of the gifts you could get them.
• Stick to your budget – and remember you don’t have to buy the entire list.
• For those un-organised amongst us, technology can help. Christmas Gift App’s help keep a record of what you have bought and what you still need to buy.
• Don’t forget that if you are buying a present as a gift for a business client, then make sure you send Blue Skies a copy of your receipt – it maybe claimable against tax.

Visiting the shops
• Can take a lot of time, although if you have a business meeting or two in the town during the day, then in-between or afterwards you could nip to the shops, they tend to be quieter in the week, you are also not paying out for additional travel etc at the weekend.
• You need to go in with a Positive Mental Attitude, only buy what you need, do not be tempted by Deal of the Day etc unless it is something on your list to buy to avoid unplanned costs.


• Saves a lot of time and can be done 24/7.
• Need to ensure prices include VAT and watch out for postage.
• If possible try to buy multiple gifts on same website – this way you may qualify for free postage.
• Register on a Cashback site, like Topcashback, Quidco. These sites could become your internet browser when shopping online, to earn extra money to then spend towards the end of the year.

• If you have the funds use your debit card, but not your overdraft facility, as this can be costly.
• If you are using a credit card, see if your current card provider can issue you with a second card, these can often be taken out quickly as you are already known to the lender and often come with 0% interest on new purchases for several months, thereby avoiding the extra interest charge.

• Treat your food shopping just like your gift list; set a budget and make a list of what you “need”, and also a list of additional items that would be “nice”. When the “need” list is done, if funds allow then treat yourself to a few of the “nice items” but don’t be tempted with unnecessary offers.
• Try to purchase non perishable items in the weeks leading up to Christmas, spreading the cost as many items will have best before dates right into 2018.
• When shopping for the Christmas Meal, try and think of it as cooking a slightly larger Sunday Roast, most of us are used to shopping for this type of meal week in week out, so don’t panic buy.
• Keep those New Year Resolutions you are considering (such as joining the Gym, getting fitter etc) in your mind when shopping. You are likely to buy extra food that you may now want to throw away.
• Consider doing an online shop for most of your shopping, and book your slot now with random items in your basket, you can change it closer to the date – REMEMBER to put the date in your diary!
• If you are going to the supermarket consider getting one of the hand held scanners so at least you can track the value of your trolley.

Personal Tax Payments by Personal Credit Cards Are Stopping Being Accepted by HMRC

Here at Blue Skies we are fast getting in to the festive cheer. Christmas decorations are being located and dusted off, the office party is booked and everyone is ready to pull out the Christmas jumpers!
Though as surprising as it may be, it seems that HM Revenue and Customs (HMRC) are not sharing this Christmas Spirit
In a move which has massively backfired, the Government under pressure from consumer groups, announced ideas to introduce a ban on the often extortionate credit and debit surcharges in the UK. On the very same day, HMRC decided that they would also not accept any personal credit card payments from 13th January 2018 for tax payments.
As one can imagine a lot of self-employed workers, company directors, tax payers and “Joe Public” are naturally angry about this. Considering personal tax payments on account are due on the 31st January 2018, removing the option to pay by Personal Credit card will leave a number of people unable to pay their tax bill, unless they have forward planned. So if you had plans to pay your tax bill with your personal credit card, then this needs to be paid before the 13th January 2018 deadline.
What does this mean?
It means that payment can only be made through Bank transfer, direct debit, faster payment, bacs or debit card.
(For any limited companies out there that might be wondering, currently business can still use business credit cards to pay VAT, PAYE, Corporation Tax and Personal Tax if needed)
Hopefully, all of our clients are already saving towards their tax payments, with our upfront tax planning advice, so this may not hit our clients as much as it may hit other taxpayers. However as much as we all work hard to ensure we are on top of our cashflow, business life is inherently unpredictable and there will be situations where things just don’t go to plan.

And if that hasn’t made paying harder. Update for those that pay at the post office
HMRC from the 15.12.2017 have announced that you will not be able to pay at the post office either! You will be able to pay be Debit card or cash if:-
• still get paper statements from HM Revenue and Customs (HMRC)
• have the paying-in slip HMRC sent you
Some branches will allow you to pay by cheque if its made payable to “post office Ltd”
We will be shortly sending out a number of emails reminding your what is due and how to pay, if you need any further advice please give us a call sooner rather than later.
Just a reminder that if you don’t pay your personal tax bill by the 31st January 2018, HMRC will send you a rather belated Christmas present of 3% interest on the outstanding amount.
If you are a client and find yourself unable to meet the payment deadline get in touch with us ASAP, we may be able to contact HMRC on your behalf and form an arrangement.
If you aren’t currently a client but feel you may be facing a similar situation, or your 2017 tax return isn’t yet complete give us a call and we can see what we can offer.

Xmas Party and Gifts to Clients and Staff

Are you considering a work Xmas party and/or giving gifts to staff or clients this year? Well here are the VAT implications of doing so… an interesting read!

Firstly, the Xmas party…

This falls under the rules of business entertainment. If it caters for employees only, then VAT included within the costs of the party can be recovered! Even where the directors attend the party.
If the party also caters for guests who are not employees, such as partners of staff or friends, the VAT should be apportioned between employees and non-employees.
As an example, if a business held a Xmas party for 20 attendees. 10 of these are employees, 2 of these are company directors and shareholders, and the remaining 8 are non-employees. They incurred VAT inclusive expenditure of £1,000. This would mean 60% of the VAT on costs could be reclaimed. In this example, that would mean they could reclaim £100 of the £167 VAT incurred.

VAT on Gifts:
In addition to receiving VAT relief on a Xmas party held, VAT can be reclaimed on Xmas gifts, given to both employees and clients.
This is only allowed if the individual receiving the gift doesn’t receive a gift worth more than £60 (inc VAT) in any twelve month period from the business in question.
So to put it simply, only provide employees and clients with an annual gift of no more than £50 (exclusive of VAT), and you can reclaim the VAT element on these gifts through your company.

Feel free to give more generously, however any subsequent gifts that result in the annual gifts exceeding a value of £50 (exclusive of VAT), you unfortunately won’t receive the same VAT relief under the current rules.

We hope this has been useful to you.
If you would like to know more about us, please contact us here at Blue Skies!

November 2017 Budget Review

Income Tax – Most people who work and pay tax in the UK will pay a little bit less tax from April next year, as the tax limits have risen slightly. For someone with taxable income of £40k they will be around £70 better off in the year; for those earning £50k and over then you are £340 better off. So not great sums of money but every penny helps.
Our advice for 40% and above taxpayers – don’t forget those tax free ISA’s offering a higher interest rate. You can put £20k into an ISA every year.

VAT – no change. Limits have been frozen for a couple more years.

Smokers – smokers have been hit hard, with an above inflation increase of 5% extra cost added onto a packet of cigarettes/cigars

Drinkers – If you drink lager, beer or spirits in England and Wales, then no real change, although at the real cheap end of the alcoholic drinks market, prices on low cost booze like “white cider” drinks are being increased in a bid to discourage heavy drinking. Scotland are in the process of introducing a minimum price per alcohol which could increase the prices of cheaper drinks.

Cars – for most drivers, there is no change with fuel duties frozen again, so just find yourself that cheapest price on the forecourts. However, if you have a diesel company car, this has become more expensive with an additional 1% tax charge per year, leaving you a bit more out of pocket. The Government is again focused on promoting “Green” Environmentally friendly cars.
For those trading through, or thinking of trading through a Limited Company, and you want to buy a car through your company, then our advice as always is to “talk to us before you buy” – as there have been small changes to some of the rules and tax. When you buy a car, as well as what you buy, could be the difference between having extra money in your pocket or being out of pocket.

Buying your 1st property – stamp duty is being removed if you buy a house anywhere for under £300k and in expensive areas (London for example) you can buy a property up to £500k and only pay stamp duty on the amount between £300k and £500k. This can save you up to £9,000 on houses under £300k.
However, if you are not a 1st time buyer but want to buy a place with someone who is a 1st time buyer then unfortunately this is help is not available to you, as both of you must be first time buyers. Our advice – Save stamp duty by getting the first time buyer to buy the house themselves, and then add the other person’s name on to the mortgage at a later date.

However like most budgets, “The Devil is in the Detail”. Tucked away in the supporting Budget paperwork there is one fly in the ointment. HMRC are going to start a review and consultation process looking at who can be self employed and/or operate through a Limited Company. This is not just for the media industry; it applies to all trades and professions. HMRC really would like to see everybody in the UK being on a PAYE contract rather than freelance contract – it means they get more tax in their coffers and it comes in easier and quicker than it does at the moment if you work for yourself.

You might already be aware that the BBC and Channel 4 are already under the cosh and being pressured by HMRC to make freelancers into PAYE employees.
Our view is that this is a huge topic to review and have a consultation on and it will impact on some very big and powerful businesses that have real clout with the government. In any event any changes are not going to come in in the short term – we predict that the earliest practical date it could be brought in would be April 2019. For most of our clients who are freelancers this will be a worrying development but rest assured that we will keep you fully updated on what is going on.

Crush the Calorie Workouts #BlueSkiesChallenge

Our last and final Challenge before the impending Christmas party, is concentrating on the dreaded stomach area.
As with all exercise it should be done in moderation and in a safe environment, and if you are in any way unsure, or have any health issues, you should not partake without the consent of a doctor.

Challenge 3

20 Crunches
18 Scissor Kicks
16 cycling crunches (each side)
14 Crunches
12 Russian Twists
10 Crunches
8 Scissor Kicks
6 cycling crunches (each side)
4 crunches
2 Russian Twists
30 Second plank

Repeat 3 to 4 times

Lie on your back with your knees planted on the floor, hip width apart
Place your hands by your ears, and elbows pointing out
Tilt your chin slightly upwards
Tighten your abdominals
Curl up forward so your head neck and shoulder blades are slightly off the floor
Hold and lower

Scissor Kicks
Lie on your back
Keep your legs side by side straight outwards
Slowly raise one leg up keeping the opposite downwards, and then swap legs one up one down, performing a cutting motion

Cycling crunches
Lie flat on the floor with your lower back pressed to the ground engage your core.
Put your hands behind your head in the same position as a normal crunch.
Next bring your knees up towards your chest, gently lift your shoulder blades off the ground,
Straighten your right leg out to about a 45-degree angle to the ground while turning your upper body to the left, bringing your right elbow towards the left knee.
Its important t o make sure your rib cage is moving, not just your elbows,
Follow this by switching sides

Russian Twists

Lie down on the floor, holding your feet slightly off the floor, or if you are unable to do this placing them on something that will not move.
Lift your body to make an imaginary V shape, hold your hands in front of you, fully extended.
Twist your torso to the right whilst breathing out, keeping your arms parallel to the floor
Move back in to the center
Repeat on the other side

Interesting Facts about Belly Fat

80% of abdominal exercise will not burn belly fat, to do this you need to ensure you mix strengthening exercises up with cardio exercise.
You must first look at your diet, days and days of crunches will not shrink your stomach if you are fueling it with unneeded calories.
If you eat lots of refined carbs it increases you risk inflammation in your stomach area, thus making you look bloated
As you get older your metabolic rate decreases slowing down the speed in which you burn calories, for women this added to hormonal changes often means excess weight is carried in the stomach area

All is not lost though!!! A balanced diet and exercise will get you the changes you aim for. If despite implementing a healthy lifestyle your weight and fitness levels do not improve it is essential you seek medical advice to get guidance.

Crush the Calorie Workouts #BlueSkiesChallenge

Challenge two of Blue skies Crush the Calorie work out is incorporating cardio and strength. This workout should take an average of 24 minutes
As with all exercise it should be done in moderation and in a safe environment, and if you are in any way unsure, or have any health issues, you should not partake without the consent of a doctor.

Challenge 2
Cardio Crush
Complete each round three times, you’ll need a timer! Do as many as you can within a minute
Burpees 60 seconds
Mountain Climbers 60 Seconds
Forearm Plank 60 Seconds
Lunges 60 Seconds
Squats 60Seconds
Jumping Squats 60 Seconds
Plank 60 seconds
Rest 60 Seconds

Stand with your feet shoulder width apart, keeping the weight in the heels of your feet and arms at side.
Lower your body into a deep squat pushing your hips backwards.
Place your hands on the floor just inside your feet, and move your weight to your hands
Jump your feet backwards landing on the balls of your feet; you should now be in a plank position.
Jump your feet back so they land outside your hands and jump up with as much energy as you have left!

Mountain Climber
Move into a push up position, with your arms straight. Engage your core. Whilst maintaining this position bring your left foot off the floor and raise your knee to your chest, touch the floor with your right toes. Then simultaneously jump your right foot back to the starting position while bringing your left knee to your chest this time. Alternate back and forth.

Forearm plank
Place the forearms on the ground with the elbows aligned below the shoulders, your arms should be parallel to the body, being about shoulder-width distance..

Whilst keeping your upper body straight hold your shoulder back and relaxed keeping your chin up. Engage your core. Step forward on one leg lowering the hips until both of your knees are at a 90 Degree angle

Squat down, pushing your bottom down whilst bending your legs. Make sure your chest and back remain straight.

Jumping squats
Following the same position as above, the only difference is as you push up; you use as much strength as possible to jump upwards.

This is a variation on the above, forearm plank; it will strengthen your core and align your posture.

A Few Fascinating Facts
Working out to music can increase your performance by 15%

Cardio exercise helps to create new brain cells thus possibly making you smarter!

With all those new brain cells exercise also makes your mind work sharper, allowing clearer focus

The more muscle you build, the more calories you will burn even when you are resting!

And even more importantly exercise apparently slows the signs of ageing.

So with a few of the small facts of how beneficial exercise is to you, what’s stopping you!!!!!

Keep an eye our for the last installment of Blue skies Calorie crush workouts coming soon

The Office is Dead – Long Live the New Remote Office!

What is an office?

Most people think of working from a desk, in a room surrounded by your colleagues, with the constant background sound of phones ringing – but this is fast becoming a thing of the past.

The New Approach
The “Office” is fast being replaced by alternative working spaces. Advances in technology, mean that an impromptu office can now be set up anywhere, sometimes within seconds. Free WIFI offered in places such as spas and coffee shops, see a new generation of technical savvy business owners, balancing a more relaxed work and lifestyle.
The BBC recently reported that stress for employees within large companies, is now at an all time high. Together with the average commuting time having increased, so it is no wonder that employees are seeking more holistic approaches to their work life.
For some, this new way of working is perfect, including examples like the following:
• for a busy parent balancing a full time career;
• the ability to work once the kids are in bed
• or at school without the commute makes a career accessible
All of these helping to eliminate the age-old decision of a career or family.

Whilst the ability to work from anywhere in the world has a large number of advantages there is also negatives. How do you avoid household distractions getting in the way of an important job? Or more extreme but still likely, how do you stop the sand getting in your keyboard if you set your desk up on a beach?
Here at Blue Skies we have three key elements for our staff, when they request to work remotely from home.

1. Trust
A huge amount of trust is placed on our staff, and we strongly believe everyone will do what’s right for the company. Therefore we trust them to be working when they state they are, with occasional reviews.

2. Guidelines
We do have certain stipulations in order to make sure the work and home life balance does not become blurred. These include making sure staff are not distracted. That staff at home can book on and off for breaks, as and when they need them. We have clear policies that outline what is expected and what can be expected from us, plus as an employer we take health and safety very seriously, so it is essential the request to work from home, or a different location, does not have any detrimental effects on any of our staff.

3. Technology and security
Blue Skies invest heavily in technology, with security being a number one priority for us. We have the ability to export and import information through our dedicated encrypted portal, and are actively encouraging clients to send in their information digitally. Wherever staff chooses to work, they still have to pass a number of security checks to be able to log on to our secure system and are also still contactable using our In-house phone system.

However, as of yet we haven’t had any requests for a home office anywhere more unusual than at homes – but who knows where our next request for a home office could be………………………………


Crush the calorie workouts
In the run up to Christmas everyone in our office is trying to burn extra calories to fit in to their party outfits.
So to help everyone along, below is a 15 minutes strength and cardio workout that will help get you one step closer to burning those calories off, plus toning those muscles up.
As with all exercise it should be done in moderation and in a safe environment, and if you are in any way unsure, or have any health issues, you should not partake without the consent of a doctor.

Challenge 1

How to do a Goblet Squat:
Stand holding a light kettlebell / or dumbbell, close to your chest, with your legs about shoulder width apart.
Squat down, lowering out bottom while bending your legs, ideally until your hamstrings are on your calves, or as low as you can go – but making sure you keep your chest and back straight and your head lifted up.
Then after your goblet Squat, throw in some Push Ups!
E.g. one Goblet squat followed by 10 Push ups first, followed by:

1 Goblet Squat 10 Push ups
2 Goblet Squat 9 Push ups
3 Goblet Squats 8 Push ups
4 Goblet Squats 7 Push ups
5 Goblet Squats 6 Push ups
6 Goblet Squats 5 Push ups
7 Goblet Squats 4 Push ups
8 Goblet squats 3 Push ups
9 Goblet Squats 2 Push ups
10 Goblet Squats 1 Push up

Exercise is so important not just for the body but for mental well being as well.
Just a 15 minute workout each day, can start you on the most amazing journey, and the best thing with Goblet Squats, is that it works areas all over your body – including your Glutes, Quads and Hamstrings.

Go on – give it a go!