An accountant who gives you the data you need …
Working with my clients, I’m frequently asked to assist with some aspect of finances ranging from assisting them in understanding the basics of business finance to actually attending their meetings with their accountant …
The immediate values to a joint meeting are that I am able to ensure that the correct questions are asked and that the accountant is talking to them in a language and vocabulary that they understand.
“And I can ask those Bloody Difficult Questions that need to be asked!”
All too often, I hear business owners say that they are unable to get the information they need to make an informed decision from their accountant. There could be a number of reasons for this, but an immediate area to consider is whether the correct information is being recorded in a fashion to enable the data and KPIs to be extracted.
These are just a few examples of the questions I believe you should be able to get an answer to from your accountant:
Can you tell what are my most profitable products?
Who are my most profitable clients?
How can I save money on fixed costs?
What variable costs need to be addressed?
When should I invest in new equipment?
How can I take money out of the business in the most tax-efficient manner?
Should I be flat rate VAT registered?
Should I use cash accounting?
With all the changes to the processes available to every business these days, and the fact that within the next couple of years you will all be expected to keep all your accounting records electronically, there are considerations to be made as to which is the best accounting system for you.
One of my trusted partners is Roger Eddowes of Essendon Accounts and Tax Ltd. Below is an extract from one of his recent blogs on”Making Tax Digital”.
According to HM Revenue & Customs (HMRC) Making Tax Digital is an essential part of the Government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
On 13 July 2017, the Government announced that Making Tax Digital (MTD) would be delayed for businesses until 2020 except for VAT. MTD then featured in the Finance Bill information published on 8 September, and further draft legislation and guidance was published on 13 September.
“Making Tax Digital means the end of the annual tax return for millions!”
The original plan from the Government and HMRC would have seen small businesses and sole traders start quarterly reporting from April 2017, but those with a turnover below the VAT threshold (currently £85,000) will now be exempt from quarterly reporting requirements unless they choose to do so.
April 2019 will be the starting date for unincorporated businesses with a turnover above the VAT threshold to start keeping digital records for VAT purposes only. Businesses will not be asked to make the switch to MTD and update HMRC quarterly for other taxes until at least 2020.
The roll-out of the initiative has already begun. Every small business owner and individual taxpayer now have access to a digital account that they can use to check their records and manage their details with HMRC.
“Have you accessed yours yet?”
Under MTD, HMRC aims to join up its internal systems and so create one account for each taxpayer, for all their different taxes. The aim will be that through your digital account you will be presented with a complete picture of your business’s tax affairs and you will be able to manage all of your liabilities at the same time, in one place.
Although HMRC claims that the annual tax return will go, businesses will still need to prepare year end accounts, renamed as the ‘year-end declaration’, in order to reconcile their quarterly payments and claim various reliefs and make accounting adjustments.
As part of the year-end declaration, it appears that HMRC will pre-populate some of the return figures such as bank interest, income from employment and pensions using the links with other internal systems. It is important to remember to check any pre-populated fields as HMRC will not always be correct.
If you’d like to find out more about Roger Eddowes and Essendon Accounts, Making Tax Digital, or working with me to improve your people, processes, positioning and profitability then do give me a call on 01280 700405 or click here to ping me an email and let’s see how I can help you.
Until next time …
If you’re looking for a partner to help grow your business, visit www.4pbusinessdevelopment.co.uk to discover how 4P Business Development can help you!