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7 Top Tax Return Tips

tax returns advice tips able accountantsThey’re ever so popular and a routine task for most people every year, the famous Tax Return. As part of our Tax Returns in Walsall and the wider West Midlands service, we come across a variety of forms that clients require, whether on an individual or corporate basis.
 
These are different of course to other forms of tax that you may need to pay through a different procedure, for example VAT returns, Business Rates or Council Tax, or stamp duty on a property transaction (with relevant reliefs such as for first-time buyers).
 
They should be simple really, and then a routine task every year, however in reality there are issues that need clariying in order to correctly reduce any tax liabilities, both before any Tax Return is actually submitted and when dealing with any Inland Revenue queries afterwards. 
 
We therefore have 7 of our common top-tips for those dealing with these Tax Returns, which are handy to know and clarify with any tax advisors you do already have or plan for:

1. Remember That a Lot is Online Now 

This is true for a lot of accounting, with less of the manual form-filling in the post, and more online preparation and submissions. 
 
It’s important then to make the most of this, whether that’s the right software system with all your raw data for the Tax Return, keeping digital copies of back-up invoices and documentation, and having different people access the same account for preparation, checking, and then submission purposes.

2. Allowable Income & Expenditure

If you break things down, it boils down to noting the difference between what you received and what you spend in order to establish the right figure to base your tax calculation on. 
 
It sounds easy, but the expertise comes with knowing what to include and exclude, sometimes just an apportionment of a certain cost which may be split between say a home and business purpose.

3. Cracking Calculations 

The number-crunching is the magical part, and although there are computerised systems to help, you can’t beat sound human judgement on this. 
 
There will be tweaks like allowances and deductions that can make all the difference in calculating that final tax liability as low as possible.   

4. A Final Sanity Check

This is always worth doing, even just to rule out any human error as well as actual omission of information and expertise. Preferably checked by someone who has not drafted the tax return, this will help iron out any last minute changes needed.

5. Issuing Payments

The painful bit of course is issuing the final tax liability, whether one-off or on an agreed payment basis. In some scenarios though this can work the other way in that you’re actually due a credit payment from Inland Revenue if your expenditure was above your income for the year.

6. The HMRC Contact 

Even with a submitted tax return and payment, you still may need further liaisons with HMRC, particularly if you’re chosen in any random sampling of people and businesses even though there is no immediate concern. Therefore be prepared, and see if any appointed accountant can be the agreed point of contact.

7. The Overall Strategy

Rather than just processing every year’s tax return year after year, you really need that wider tax advice to make the most of things longer term. 
 
Even if there is initial time and cost to re-structure things or bring in expertise, this may pay off longer term with reduced or at least deferred tax liabilities.
 
In short, take a step back and see other ways that you can reduce your tax liabilities. Even if you’re still preparing and submitting tax returns yourself and bringing in the experts for certain parts, this can truly pay off longer term.
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Hiring an Accountant - What Do They Actually Do?

account records able accountantsYou could always opt to work through your accounts out yourself or delegate to a colleague. However, we know that you will be keen to use your time on tasks that will lead increased revenue rather than record keeping and tallying up outgoings. Perhaps your colleagues will also be eager to drive business and less than thrilled about poring over the figures from the last quarter.
 
Why not outsource to a freelance accountant or an accounting firm? Let them deal with the paperwork and deliver you a crisp and tidy tax return. But what do they actually do and will you be spending money needlessly? If you’re running a startup you’ll be wary of spending money without just cause. With a little more dedication could you not take a deep breath and plough through your financial records yourself? What does a dedicated accountant actually bring to the table? In this article we’re going to address this question. 

1. Your Business Plan 

If you are anticipating running a startup the services of a good accountant could provide enormous assistance in compiling your business plan. Even if you have already worked out your plan a pair of fresh financial eyes can help you to focus on the elements that are vital to making your business run efficiently. 
 
An accountant can help you to set milestones along the way and work with you on the means to judge how well you are doing. A professional working with the latest accounting software will be able to offer you the tools to accurately analyse how well you are doing. 

2. Going to the Money Men 

A good accountant will be able to give you guidance on how your company will actually make money. You may have had an excellent idea for a new product or service but it may take the observations of a financial expert to show you the true value of your business and how it might give you the best return. 
 
If you’re seeking outside investment your potential investors will be impressed that you have invested time and effort in seeking outside professional input. 

3. Regulating the Cash Flow 

Once it is up and running your accountant will help you to analyse your business’ cash flow. He or she will be used to working with new businesses and their experience will pay dividends when it comes to anticipating how and when your business might need a fresh injection of cash. 
 
They will plan cash reserves and work with you on strategies to avoid running out of capital. 

4. Debt Management 

There will come a time in the lifetime of most businesses when they will have to accrue a small or large amount of debt in order to expand. If you need to borrow money your accountant will be the best person from whom to seek advice. 
 
He or she will be best placed to work on the best deal for you and help your business to work out a realistic plan for repayments. 
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6 VAT Return Top Tips

vat tips able accountantsAs VAT return accountants in Walsall, we can easily help deal with the tax man and the regular VAT liabilities that individuals and businesses incur. Whether that’s a one off trouble-shooting and planning session, or a steady ongoing submission and processing basis, we can help you out.
 
In terms of the nitty-gritty of VAT payments and returns, then here are a few pointers and tips to help you directly or if you’re involved with others in this process:

1. Remember That Most Things Are Processed Online

The internet is dominating accountancy anyway, but particularly so when it comes to communication and submission with authorities like HMRC and your VAT return. Occasionally we deal with paper copies, but most is online nowadays in terms of submission and then dialogue, making things easier once they are correctly set-up.

2. Get The Right Information

So no matter  how slick your process is, if you have the wrong information then you’ll have the wrong VAT liability and problems brewing. Therefore make sure all the right income and expenditure information is processed, the correct adjustments are made, and then a final sanity check of everything is made before final submission.

3. Work Out Who’s Boss 

So a VAT Agent can be elected to deal with a client’s VAT liability direct with HMRC. Now although that will of course incur a cost, it brings with it peace of mind that they not only resolve but they literally be the point of contact with HMRC for the whole process to happen effortlessly. If this isn’t suitable, then clearly establish what roles people do have, and who is the ultimate boss and point of contact.

4. Don’t Forget Basic Income & Expenditure 

So the basics are that simple – what VAT you had to pay on expenditure can be accounted for against VAT you received on income, with any final balance paid to HM Revenue & Customs or if vice versa, they pay you a refund. So look carefully at what are legitimate ones are to include, particularly mixed uses and elements of these that can and should be included.

5. It’s All About Timing 

So every quarter or so a new VAT return needs re-submitting, and therefore all procedures and paperwork to follow suit. Deadlines and timescales are critical to the smooth running of any VAT systems once things are nicely in place.

6. Decide of Registration 

So even if you’re not obliged to register, it may be in your best interest to. Therefore carefully look at when and how to best register, and then the best overall procedure and strategy to make the most out of VAT systems afterwards.

The Slick VAT System 

With VAT, once it’s correctly set up and the right information is utilised it should tick along nicely. However these preliminary aspects are critical, involving the above 6 tips, to make sure your VAT returns run smoothly – either yourself or through appointed accountants 
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Eight Things to Ask a Potential Accountant

questions for an accountant ableYour decision to use accountant in Walsall is the first step to getting the books of account for your business organised.   The selection you made may have been influenced by certain factors relating to your business; value for money, services offered and the accountant’s reputation.
 
There are more factors to consider before making your final choice.   It is advisable to ask your potential accountant a few questions to ensure that you will get a fair and honest service. 
 
Here are eight questions that you should ask your potential accountant in Walsall. 

1. Is your company registered with a governing body?

This question will probably be answered when you walk into the office, it is usual for accountants to have certificates on the walls including membership to governing bodies.   However, you should still ask the question.  
 
If the accountant is a member of a known governing body this will show that, at least they are qualified to do the job you may be hiring them to do. If they are not registered with a governing body, then it may be an idea to think again about your selection.  

2. Does your company have insurance?

Check what type of insurance cover the accountant has. This will ensure that if something goes wrong the accountancy company can reimburse you for any financial loss that occurs due to a problem with their firm.

3. What will your services cost?  

It is a good idea to get this question in at the beginning.  It may save you time and money.  An accountant may charge you a fee after completing any work that is done on your behalf or depending on your requirements; they may charge a monthly fee.  Ask for a hard copy of the costs, this will give you something to compare with other accountants costs.

4. Can you provide me with references for your company?

References play an important part in helping you to decide which accountant in Walsall is the best one to use.   A good accountant will be happy to show off references and defend the company reputation.  It is wise to ask for contact details of any referees if they are not offered to you.

5. Who will be working on my accounts?

The answer to this question will depend on the size of the company.  It is important to have a good working relationship with an accountant.   If the accountant is not a sole trader then ask to meet the person who will be working on your accounts.  

6. What other services do you provide?

This is handy to know.  As your business grows, you may need to consider other services like payroll for example.   Best practice is to keep all of your accounting needs in one place, so you need to make sure that the accountant in Walsall has services suitable for your business now and in the future.

7. How many local Branches do you have?

This may seem like an unusual question, but it is a good idea to find out how many branches there is.   The answer will show how big the company is. Size can mean the difference in the service that an accountancy firm offers.  A smaller company may offer more personal service whilst a big company may offer a less personal service.

8. Accountants Terms and Conditions.

Terms and conditions may vary from company to company and it is wise to ask for details including the small print.  You do not have to sign the terms and conditions until you have had them checked out by your legal representative.  This document can often be confusing and it is always advisable to have them checked out and explained to you in layman’s terms.
 
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7 Aspects to Good Bookkeeping

bookkeeping tips able accountantsWe provide bookeeping services in Walsall and the wider West Midlands area for a range of clients, and often find various aspects to it being misunderstood or ignored. On the face of it, bookkeeping is straight forward and keeping an accurate tally of the figures in your books and in actual fact once the principle is understood it is a very routine task that various people can easily undertake. 
 
The challenge though is to first appreciate just what’s involved with this, therefore here are 7 pointers to help steer you in the right direction:

1. Understand Whether It Is Single or Double Entry Book Keeping

To save going into too much detail, check with an accountant the final purpose of the accounts, and which format is both needed and practical in your circumstances. Double Entry may mean bookkeeper gets more complicated but can help cross-check things nicely; this is where each transaction has two different aspects to it, with a debit in one ledger and credit in another ledger.

2. Realise the End Accounting Goal

So often a good set of figures and books will then help a accountant prepare accounts like profit or loss or a balance sheet for a particular accounting or statutory purpose. They can also be used to produce management and financial reports which can help within a business or organisation. 
 
Whatever the end goal, check at the outset what this is, as although the basic figures are the same the way in which they are presented along the way may change. In addition, you may need a Trial Balance and Ledgers at the end of the bookkeeping process ready for this accounting stage.

3. Make Sure a Matching Bank Reconciliation is Completed 

In short, every transaction you have in the accounts needs to match an actual payment transaction through your bank or payment method. So each bank receipt and payment needs cross checking and matching up nicely, with software available to help link these together more easily.

4. Don’t Forget Your Paperwork

In extreme circumstances a client can walk in the office with a carrier bag of receipts and invoices that all need matching up with the accounts! Each transaction, both an expenditure to a supplier or income from a customer, needs the right back-up paperwork to go with it, a job in itself if they’re not correctly logged and matched already. We blogged here about some practical ways of getting this ‘paperwork’.

5. Report on the Consequences 

Although this is more on the accounting purpose afterwards, this critical stage of getting the books in shape can help identify issues that need addressing. So whether that’s a VAT return to complete, a tax liability to resolve, or issues of arrears and what is owed to you by a customer or what you owe a supplier – these all need identifying sooner rather than later

6. Note the Income & Expenditure

Don’t forget that it’s that simple – to note what income you receive, what expenditure you incurred, and so what’s basically left. Be clear on what receipts and invoices fall on which side of the income/expenditure fence, and even look into basic accounting principles of debits and credits and a profit and loss account.

7. Understand How You’re Processing Things

So it may be a simple daybook, and ledgers for a supplier and customer that need manually updating and then checking. Or it may be using high-tech software and cloud based virtual services and systems to produce these. Whatever it is, make sure it’s not only right and cost effective but effectively used by people.

8. Assign the Right People 

It may be just the one bookkeeper completing changes, or it may involve others preparing them and then another checking and completing them. Both methods can work depending upon the circumstances, and the pros and cons of each need exploring. 
 
We often work with clients who are encouraging someone else within their business to produce the main books, and we simply assist say every year to check them. 

9. The Final Sanity Check & Tweaks

So the books are done and ready to roll, however those final checks and tweaks are always worth checking, ideally with a fresh set of eyes. After figures come through in the after-accounts, then check that these make sense and that there are no human or process errors. 
 
Also, final accounting changes like deprecation can help sharpen things up nicely
 
In summary, it’s important to know the process needed for bookkeeping, who will be involved, and what the actual tasks are. Once these are in place, then the actual books should be straight forward, with expertise at least every year helping to check them and then use them for all kinds of accounting and financial purposes.
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