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Why Should You Have An Accountant For Your Small Business?

183:795740524 (Tariq Javed) — Sat, 30 Oct 2021 11:31:20 GMT

Why Should You Have An Accountant For Your Small Business?

As a small business owner, you are likely used to turning your hand to a variety of tasks. Small business owners are often more than used to doing everything themselves and juggling a wide variety of jobs all at once. However, no one can have expert knowledge on every subject, so some tasks in your business are better left to the professionals.

Enlisting the help of an accountant for your small business can benefit your business in so many ways. When you choose to use professional accounting services , you will discover there are many reasons why hiring an accountant is a helpful decision. Here are some of the reasons you should hire an accountant for your small business:

Gain a Trusted Business Advisor

In today’s fast-changing financial climate, the role of accounting advisory services is becoming increasingly important. Making business-critical decisions without the figures to back them up is risky. Having a trusted financial services expert on hand to provide you with advice is an invaluable resource and something that will benefit your business time and again.

Having the reassurance that you can discuss future plans for your business with your accountant before you commit to further expenditure will help to minimise the risks involved. Your accountant’s advice will provide you with the insights you need to make sustainable decisions that strengthen your business rather than harm it.

Saves You Time

Keeping your accounts up to date can be a time-consuming process, and it is easy to let them slide, especially when you are busy. Things can quickly spiral out of your control when you don’t have the spare time to give your business finances the attention they require. When you lack time to dedicate your attention to your business finances, you may fail to spot potential issues before they become a far more significant issue.

Without regular monitoring, you may find yourself with a backlog of bookkeeping and panicking because there is very little time left to file your tax return. Failing to keep up with your accounts due to a lack of spare time can have far-reaching issues throughout your business. Having an accountant take care of your accounts on your behalf will allow you to focus on other areas of your business, knowing your accounts are in safe hands.

Ensures You Avoid Mistakes

Having a qualified accountant can help you avoid making mistakes with your accounts that could impact your business. When you are short of time and trying to juggle managing your accounts alongside a heavy workload, it can be easy to make errors. Unfortunately, even minor errors can impact the accuracy of your accounts and lead to miscalculations. Leaving your accounts to a professional accountant will help you avoid these potential issues. With years of training and experience behind them, an accountant will be able to handle your accounts with ease.

Gain Expert Knowledge Without Over-Spending

Appointing a CFO to your team may not be financially viable, but enlisting the help of an accountant provides you with a cost-effective alternative. An accountant will be able to offer a package of support to suit your business, so you will pay for the exact level of accountancy support you require. With the help of an accountant, your business will benefit from expert financial advice and guidance, and your accounts will be monitored without you needing to pay an expensive CFO salary. The benefits your small business gains from having an accountant will far outweigh the costs involved.

Provides Valuable Insights

An accountant can play a crucial role in helping your business continue to grow and become increasingly profitable. Having an accountant closely monitoring your company’s financial position will enable your business to benefit from expert guidance and valuable insights. The insights that your accountant provides will help you make informed business decisions and avoid unnecessary financial risks.

Summary

If you have been trying to manage your accounts alongside the rest of your workload, you will know that it can be challenging to try and give them the amount of time and attention they deserve. Failing to dedicate enough time to your accounts can have far-reaching consequences throughout your business. So, having an accountant by your side to provide the support your business and monitor your finances is an excellent way to ensure your small business has the professional support it needs to thrive.

If you are looking for an accountant to support your small business, why not get in touch and find out how we can help.

What Characteristics Make A Good Accountant?

183:795740524 (Tariq Javed) — Mon, 25 Oct 2021 11:22:20 GMT

What Characteristics Make A Good Accountant?

Finding an excellent accountant can make a significant difference to a business and play a crucial role in helping it achieve a high level of success. Nowadays, accounting services provide much more than simply completing tasks such as bookkeeping and submitting tax returns. While the arrival of technology has led many of the basic tasks associated with accounting to become automated, it would be impossible for technology to replace the many benefits an accountant brings to a business.

Financial accounting and financial accounting advisory services play a pivotal role in helping businesses manage their finances. To meet the challenges of modern-day accounting, these financial services professionals often take on a role equivalent to a CFO. As the role of an accountant is a highly responsible position, it is essential to find the best accountant for your business. Here are some of the characteristics which are beneficial for accountants and will enable them to provide excellent accounting services to their clients:

Good Understanding of Business

Accountants are increasingly involved in providing businesses with information in an advisory capacity. The financial information that is interpreted and reported by the accountant is then used by the company to inform critical decision-making processes. Having a good head for business and clear understanding of business models is invaluable when delivering advice to clients that will be used as a basis for business-critical decision-making.

High Level of Attention to Detail

Many people think of accounting as purely numbers on a spreadsheet. There is much more to accounting than updating accounts. An accountant needs a high level of attention to detail to report figures accurately and be able to interpret the information effectively. Inaccurately recording figures at any stage of the reporting process or misinterpreting them could lead to the information becoming wildly inaccurate and causing future issues created by skewed results.

Honesty and Integrity

Maintaining honesty and integrity at all times is essential when working as an accountant. The role of an accountant puts them in a highly responsible position and requires them to be trusted with a vast amount of information. Taking care of a company’s accounts sometimes means accountants can access the business’s bank accounts, so a high degree of trust is put into the accountant by the business. The financial information that accountants are privy to is also often highly sensitive. Treating this sensitive data with great care and using it only in the manner authorised is vital to prevent any breaches in integrity.

Understanding the importance of client confidentiality and acting ethically and honestly every day is a crucial part of an accountants role. This need for honesty and integrity extends to the need for care when discussing client information and ensuring that information is only discussed with those that are authorised.

Strong Communication Skills

While accounting is focused on numbers, there is a definite need for strong communication skills too. This is because a critical part of an accountant’s job is to deliver information to stakeholders. Producing financial reports and then presenting them to the organisation is something that accountants will need to do on a pretty regular basis.

The accountant will need to deliver the data clearly and concisely while also being able to explain the figures where necessary. At times, the data will need to be presented to stakeholders that may not have a great deal of accounting knowledge and may struggle to understand the data. Therefore, the ability to explain complicated accounting terminology and data in an easy to understand format is an essential part of the job.

Excellent Time Management

Time management is a key skill required throughout many careers, and accountants are no exception. Having excellent time management skills is vital for accountants as there will be many occasions when tasks need to be completed to meet a specific deadline. It is essential for accountants to have their client’s accounts prepared and ready to file to meet tax deadlines; otherwise, this could result in severe penalties for the business. So, effectively managing and updating the client’s accounts throughout the financial year is a key task that must be completed on time.

Time management is more than just a skill needed at the end of the financial year. Each month and each quarter, accountants have financial reports that need to be produced and getting these completed on time is essential.

Are you searching for an accountant with the skills and knowledge needed to take the best care of your accounts? Our team will be happy to help.

What Are The Objectives Of Financial Accounting?

183:795740524 (Tariq Javed) — Mon, 18 Oct 2021 07:21:55 GMT

What Are The Objectives Of Financial Accounting?

Keeping accounts is vital for every business and one of the most crucial tasks for organisations to perform. Financial accounting is about so much more than simply numbers on a spreadsheet; financial accounting is at the centre of every aspect of the business and performs an essential role in its success.

Understanding the objectives of financial accounting is essential to gain the full benefits from this service and to find out how it can benefit your company. Here are the objectives of financial accounting, which explain in more detail how financial accounting helps businesses:

To provide a concise record of a business’s finances

Every company needs a systematic method of recording its financial activity, and this is provided by financial accounting. Financial accounting offers an organised and accurate method to record a business’s financial transactions. This permanent record of a business’s financial performance is then used in a variety of ways and distributed to key stakeholders such as the board and shareholders.

To maintain the consistency and accuracy of financial information

To be accurate and complete, an organisation’s finances need to be recorded in a uniform manner. Recording a business’s financial information on an ad hoc basis does not provide an accurate picture of its financial situation, and the data collected does not have much value. Instead, businesses need to use financial accounting to maintain a consistent method of recording their financial transactions. Financial accounting also enables them to report their finances accurately and to provide meaningful information.

To track and compare a company’s financial performance

Running a profitable business requires continual monitoring of the company’s finances. Unless the business’s accounts are up-to-date and complete, it is impossible to establish how well the company is performing. Knowing how well a business is performing at any given time is essential information that stakeholders need to track performance and compare figures year on year. Without this information, it would be impossible for companies to know how their financial performance compares to previous years. Every business strives to increase their turnover and profits each year while also reducing their costs, and financial accounting enables them to see whether they are meeting these goals.

To monitor financial risks

Failing to maintain accurate financial accounts can lead to severe issues and could mean potentially precarious financial situations are missed when they first arise. Failing to spot worrying financial trends can lead to the matter escalating into a more severe situation without anyone even noticing. Financial accounting enables businesses to take a proactive approach to their financial affairs, deal with any issues promptly, and ensure the company gets back on track quickly.

To inform decision-making

Having the ability to make informed business decisions is vital to ensure the long term survival and success of a company. But, to ensure any decisions made by the business are based on a solid body of information, it is necessary to have an accurate set of accounts. The insights provided by financial accounting are needed to make a wide range of business decisions. Whether a company is planning to upgrade their IT system, invest in new machinery, or considering expansion, each of these decisions needs to be based on a complete set of figures. Financial accounting will also be required beyond the initial decision-making process and will be used again to determine the return on investment provided by the purchases.

To comply with legal regulations

Keeping an accurate and complete record of financial transactions carried out in the course of business is vital for companies. This information is needed to comply with legal requirements, such as completing and submitting a tax return. The financial statements created by the financial accounting process may also be required for regulatory purposes for financial services companies and to demonstrate transparency within the organisation.

Conclusion

As you can see, businesses are obligated to provide accounts each year, but financial accounting performs a role beyond fulfilling compliance. The information recorded in a business’s accounts is valuable in every aspect of the company, from informing critical decisions to monitoring the business’s financial performance in any given time frame.

Choosing the best financial accountants to take care of your business’s accounts can provide a whole host of benefits and will help to guide your business forward to even greater success. Selecting the best financial accounting services will ensure your business finances are in safe hands. Get in touch today to discuss your accounting needs, and we will be happy to help.

Tips To Save Time And Money On Accounting And Bookkeeping

183:795740524 (Tariq Javed) — Mon, 04 Oct 2021 15:21:44 GMT

Tips To Save Time And Money On Accounting And Bookkeeping

Accounting and bookkeeping are without doubt essential to run a compliant and effective enterprise irrespective of its size. Bookkeeping involves recording your financial transactions, while accounting involves interpreting and summarising the data gathered from bookkeeping.

As a business owner, you are required by law to keep accurate records. Still, the benefits of proper accounting and bookkeeping extend far beyond compliance since you can obtain a genuine impression of your company's performance and take critical business decisions. Below are some helpful tips you can rely on to save money on accounting and bookkeeping.

1. Separate Your Personal And Business Finances

Setting up a different bank account for your business is crucial to proper accounting and bookkeeping , so keep this in mind. A business bank account will allow you to draw a distinct line between your personal and company finances.

This way, you can easily and quickly record business expenses without much confusion over whether your cash prevents you from seeing your company's genuine financial standing. As such, it is much easier to know if your enterprise is making a profit.

Additionally, recording your business expenses via a separate bank account makes tax filing more convenient, saving you significant time and energy.

2. Automate Your Bookkeeping With Accounting Software

Automated business processes are undoubtedly worth considering to save time and money. So using accounting software is necessary to streamline your company's accounting and bookkeeping.

This is typically cheaper than hiring a bookkeeper, and this software can automate several accounting processes. You can track business expenses, create invoices, and access financial reports whenever you need them.

Xero, Quickbooks, and SAGE are three of the best and most popular accounting software in the UK that you can consider for your enterprise's accounting and bookkeeping needs.

3. Reconcile Bank Statements Regularly

It isn't uncommon to notice discrepancies between your accounting books and bank statements regarding your bank balance. Often, this difference is because clients are yet to deposit their cheques at the bank, and these banks can also take a few days to clear cheques before balances are reflected in your accounts.

However, these differences can also be due to fraudulent activities and accounting mistakes. Therefore, it is crucial to reconcile your bank accounts often to identify any errors and prevent fraud. Also, it is always best to resolve any errors you come across while reconciling right away, especially if you are in charge of your bookkeeping.

This way, you can avoid carrying the error for longer than necessary, circumventing penalties, wrong tax bills, and inaccurate financial statements in the process.

4. Consider Hiring A Professional Accountant

There are reportedly over 300,000 accountants in the UK and Ireland, all of whom can make a big difference when seeking to save time and money with your accounting and bookkeeping. A financial professional can help you keep up-to-date records and help identify loopholes, potential fees, and tax deductions for which you may qualify.

However, it is crucial to find the right accountant for your business, So pick one who can communicate with you in a way that you understand. Also, choose highly-trained and experienced accountants that demonstrate dedication to helping your company navigate all challenges that arise when handling business accounts.

They should take the hassle of accounting and bookkeeping off your plate, allowing you to concentrate on business development.

5. Plan For Significant Expenses Like Taxes

Many business owners dread receiving their annual VAT bills because discovering their bills' sizes pushes them to calculate how hard up they will be for the next few months.

However, you can avoid the element of surprise by keeping track of your financial records to anticipate your tax bills. For this, you can set aside some money for tax every month, corresponding to your monthly income.

This way, you will always have the funds necessary to pay your tax bill, avoiding the single huge outlay and many months of financial hardship.

6. Track Your Daily Expenses In Detail

Many entrepreneurs approach their accounting and bookkeeping from an overview perspective with little focus on their daily operations. However, not tracking your daily expenses in detail can interfere with your accounting and bookkeeping accuracy, so it would help to keep tabs on even the most minor costs you encounter daily.

These expenses can add up in no time and can eat into your company's finances quickly. As such, tracking them can help you know what you are spending on and whether you can eliminate or cut back on certain daily costs to save money.

Who Needs To File A Self Assessment Tax Return?

183:795740524 (Tariq Javed) — Tue, 28 Sep 2021 13:02:43 GMT

Who Needs To File A Self Assessment Tax Return?

There are various types of tax returns that need to be filed and completed by set dates every year. For many professionals, understanding which one you must file can be extremely confused.

The Self Assessment is one of the most common tax returns around, and we'll explain what it is and who will need to file one. This will help you understand if you need to file this tax return, or if there's a different one for you to worry about.

What is a Self Assessment Tax Return?

Simply put, this is a specific way of paying tax in which you are responsible for getting everything together and filing a return. This can be filed online or via paper documents, and it will include all of your taxable income and capital gains, along with any tax allowances or reliefs that you've claimed.

A Self Assessment is sent to HMRC, and it stipulates how much tax will need to be paid. This is then checked, with confirmation coming through to your Government Gateway account, confirming how much you need to pay.

Each year, a Self Assessment needs to be submitted to cover the previous tax year. For the upcoming deadlines, you're looking at between 6 April 2020 and 5 April 2021. The deadline to submit your return for that tax year is January 31st 2022 - and this is also the deadline to pay the tax you owe.

If you are submitting it via a paper form, the deadline for submissions is 31st October 2021. You also need to register for Self Assessment by 5th October 2021 to submit a tax return for the previous tax year.

Who Needs to File a Self Assessment?

The good news is that not everyone needs to file one of these tax returns . If you are in full-time employment and get paid via PAYE, you WON'T need to file a Self Assessment - unless specific criteria are met, which we shall discuss shortly. The reason you won't always need to submit an SA is that you are already paying tax through your job.

Instead, Self Assessments are typically filled in by:

● Anyone that is self-employed - and earned over £1,000 before any tax relief has been taken off

● Anyone that's a partner in a partnership business

However, you only need to register to file a Self Assessment for the upcoming January 2022 deadline if you were either of the above in the last tax year. So, if you started being self-employed or became a partner in a partnership business on 6th April 2021, you aren't eligible to submit a Self Assessment for the previous tax year. Instead, you should still register and be ready to pay tax next year for the upcoming tax year.

Other reasons to file a Self Assessment

HMRC stipulates that you will not usually need to send a return if your only income is from wages or pension. However, some people with full-time jobs or pensions may need to file a Self Assessment under the following conditions:

● You earn money from rental properties

● You get extra income from tips and commission

● You generate income from savings, investments and dividends that's greater than £10,000 before tax

● You earn foreign income that needs to be taxed in the UK

● Your annual income is greater than £100,000 before tax

As a general summary, Self Assessment tax returns are mainly for people that don't pay tax through the more traditional means of PAYE. Still, there are some unique cases where you will need to file an SA even if you are paying tax through your job.

What Are The Self Assessment Penalties?

Firstly, you need to understand that HMRC won't contact you and tell you to fill in a Self Assessment. This is something you need to notify them of, and it's done by registering an account and filing your first return. If you fail to notify them, and they find out, you can be hit with big fines and penalties.

For those of you that need to file an SA and miss the deadline for submission or payment, the current fines are as follows:

● £100 is your SA is up to three months late

● Interest charged on late payments - this can vary and will increase depending on how late you are

Overall, it's vital that you understand if you need to file a Self Assessment, and how to file one. If you need help with this, contact the Smart Solutions Taxation & Accounting team today, we're an experienced and friendly UK firm that will help you work out if you need to file an SA, then get everything sorted correctly and before the deadlines.

What Can A Property Tax Advisor Do For Me?

183:795740524 (Tariq Javed) — Wed, 22 Sep 2021 09:03:25 GMT

What Can A Property Tax Advisor Do For Me?

Do you own multiple properties in the UK? Are you currently - or planning to - rent out one or more of your properties? The UK is full of landlords that do this all the time, largely as rental properties are a fantastic source of passive income. It's one of the most popular ways of using properties, and we've also seen an increase in people who own a house, move overseas, and rent out their UK home while they're abroad.

Regardless of why you're doing it, if you make money from rental properties, you may need to pay tax. In fact, any income that's generated from your property - by any means - that exceeds £12,500 will need to be taxed.

As you can imagine, things can get quite confusing when you consider what tax you need to pay, how much needs to be paid, and when you need to pay it. This is where hiring a property tax advisor can really be beneficial.

What is a Property Tax Advisor?

A property tax advisor exists to help you file any taxes owed from money generated by your property. The sole purpose is to guide you through the tax filing process, ensure you find the right forms to fill in and help you in any way possible.

Why should you work with a Property Tax Advisor?

What benefits can property owners see when they hire a property tax advisor to work with them?

Firstly, you will benefit from an extreme amount of expertise in your back pocket. Property tax advisors are updated with all the latest legislation changes and tax trends, ensuring you always know exactly what needs to be done.

You will never be in a position where you miss tax payments because you were unaware of rule changes or new deadlines. A property tax advisor uses their experience and knowledge to constantly stay on top of things while keeping you in the loop.

Secondly, working with property tax advisors lets you learn more about your property and how successful it is. A significant part of the tax filing process is seeing how much money you generate from your properties.

This means you have to keep up-to-date accounts detailing how much income you earn - as well as what expenses go into running your rental property. Alongside understanding how much tax you need to pay, this can help you see if you're making a profit or not. Thus, you can use the information provided by your tax advisor to see where you can maybe improve operations and make your property more profitable.

Thirdly, working with the right advisor can help you if you are currently a non-resident landlord with property in the UK. HMRC set up the Non-Resident Landlord scheme to tax non-UK residents with rental properties, and it can be confusing to get your head around.

When living abroad, you don't always have time to think about your property or remember important things like tax. Experienced property tax advisors will guide you through this scheme and handle the process for you. Professional advice will be given out to ensure everything goes as smoothly and hassle-free as possible.

Finally, you can save money on taxes by working with property tax advisors. A lot of landlords are unaware of what can be claimed as an expense. Therefore, you're filing tax returns without taking off expenses that can lower your total bill.

With experienced tax advisors in your corner, you will learn exactly what you can legally claim as an expense to get deducted from your tax bill. Not only that but there are certain tax reliefs that landlords might be able to claim. Again, working with a specialist property tax advisor will help you see if you're eligible for any reliefs. Thus, you can reduce your tax bill even further, saving more money.

Where can you find a Property Tax Advisor?

Ideally, you want to hire property tax advisors that are vastly experienced and can offer comprehensive services that are tailored to your specific means. As it happens, you're in the perfect place for this!

At Smart Solutions Taxation & Accounting, we have all the experience necessary to help you get the most out of your properties. If you're a landlord that resides in the UK, we can assist you with all things related to taxes.

This includes working out how much tax you owe, handling your expenses, and helping you file the necessary tax return. We can also help non-UK resident landlords with their taxes on UK homes as well.

To learn more about what we can do for you, get in touch with a member of our team today!

How to File a Company Tax Return: The Complete Guide

183:795740524 (Tariq Javed) — Tue, 14 Sep 2021 14:54:36 GMT

How to File a Company Tax Return: The Complete Guide

Businesses around the UK will need to pay Corporation Tax every single year. Before you can do this, you need to fill in and filed a company tax return.

This is typically referred to as form CT600, and it is necessary to help you figure out if you need to pay any Corporation Tax or not. Even if you have made a loss or don't believe you need to pay any tax, you will have to file your company tax return before the deadline or risk being penalised by HMRC.

Those of you that may have spent some time self-employed will know that a self-assessment tax return needs to be filed by the same date every single year. Things are different with a company tax return; the deadline depends on your company's accounting period.

You will need to file your company tax return 12 months after the accounting period ends - and this relates to the accounting period the return will cover. You can find out when your accounting period ends by looking at your business tax account on the HMRC website.

Keeping all of this in mind, how do you fill in form CT600 and file your company tax return?

What you need before filing the return

First of all, you need to have some information handy to help you fill in the return with as little stress as possible. It helps to get everything together before you start filling in any forms, this stops you from getting to a page, then needing to look for the relevant information somewhere in the office.

So, here's what you need:

● Taxable profit earned by your company - this includes any tax allowances or business expenses subtracted from your total income. Don't forget about multiple revenue streams if you generate income from various sources. Naturally, this also means you will need information on all your business expenses and taxable allowances.

● Your login details - if this is your first time filing a company tax return, you will need to generate some login details for the government website. You can do this by heading to the gov.uk website here and filling in your email address. You'll be sent a code that then provides you with your Government Gateway ID and a password. Keep these safe as they will be used to log you in every time you file a company tax return.

The second point is a key one; this is all filed online via the government website. HMRC is actively trying to stop people from filing paper forms unless you have a reasonable excuse as to why you're unable to file it online.

Businesses that file their returns in Welsh will fall into this category as it's currently not possible to file a Welsh company tax return online, so the paper version will be needed instead.

Filling in the CT600 form

Once you have all of your information handy, and you've logged into your account, you can choose to file a company tax return. It's all self-explanatory on the government website, and you will eventually be presented with the digital CT600 form.

It's 11 pages long, which might seem very daunting, but there is some good news. HMRC creates a universal form for every business, meaning many of the questions only relate to specific types of businesses. Thus, a lot of the questions will be left blank for you as they aren't relevant.

Below, we've provided a look at the main sections and boxes that you will definitely need to fill in on your return:

● Boxes 1-4: Company Information - A straightforward section; this is where you fill in all of the company details. You need to input your company name, registration number, tax reference, and the type of company you are.

Following this, there is a Northern Ireland section (boxes 5-8) where you need to tick the boxes if appropriate. This is only for businesses that trade in NI or are based there.

● Boxes 30-35: About This Return - Here, you need to provide details on the dates that this return will relate to. In essence, it's your accounting period.

● Boxes 40-75 in the About This Return section aren't relevant to everyone and simply ask you to tick any of the appropriate boxes on the form.

● Boxes 80-85: About This Return - Still in the same section, these are the next boxes everyone will have to fill in. This is where you stipulate if the attached accounts are for the period stated above, or if they relate to a different period.

● Boxes 145-150: Turnover - A very important section, this is where you place your company's turnover for the relevant period. If you don't have a turnover, you leave 145 blank and put an x in 150.

● Boxes 155-205: Income - This is simply where you put in all the numbers relating to your income. Each box is clearly labelled with what you need to include, such as trading profits, trading losses, and so on.

● Boxes 210-220: Chargeable Gains - Input your gross chargeable gains, along with your allowable losses. Box 220 makes you take your allowable losses away from your gross chargeable gains to find your net chargeable gains.

● Boxes 225-235: Profits Before Deductions and Reliefs - Boxes 225 and 230 let you specify any losses you've made. Box 235 finds your profits before other deductions and reliefs, which is the sum of boxes 165 to 205 and 220, minus the sum of boxes 225 and 230.

● Boxes 240-325: Deductions and Reliefs - Here, you can make notes of any trading losses, expenses and reliefs.

● Boxes 330-440: Tax Calculation - Fill in all of the boxes with your figures to find out how much corporation tax is due.

That's basically all you need to fill in, and the most challenging part is finding and working out all of your deductibles and expenses. It's essential that you file your return before the deadline or you can be hit with fines.

Currently, HMRC sets the following fine rates:

● £100 penalty if it's a day late

● £100 penalty again if it's three months late

● 10% of your estimated corporation tax bill if it's six months late

● Another 10% penalty if it is twelve months late

It's crucial that you file your company tax return on time and that all of the information is accurate. If you need help doing this, working with qualified business accountants can make the whole process a lot smoother. Feel free to contact Smart Solutions Taxation & Accounting today to see how we can be of assistance.

The Guide to Going Paperless in Accounting

183:795740524 (Tariq Javed) — Thu, 26 Aug 2021 09:09:39 GMT

The Guide to Going Paperless in Accounting

Everything is going virtual these days. Nothing of documentation is being left behind, as everything is accessible on the cloud. For your business, you should work with an accounting service that is totally paperless too.

Aside from helping the environment, you also have many other clear and present positives. You save on office supply costs such as printers, ink cartridges, paper, folders etc. statements, receipts, invoices and more, are all in one place and easily accessible from the office or from home. Here is a guide to going paperless.

How it begins

Your ‘going paperless’ journey begins when you scan your documents into your cloud or IT infrastructure. This will help you to get into the habit of accessing your documents only in a virtual manner. So if you want to read, edit or send your documents, you can only do so virtually. The days of your fax machine are numbered!

It's vital that you select an appropriate organising strategy for your financial documents. Different files should be labeled and house documents that are particular categories. You’ll begin to notice how each different document looks, regarding their design and the information they display. Then you can start to use PDF software to edit and change your documents to suit your liking.

Mimicking your documents

As mentioned above, next you should begin to design your accounting documents in a PDF or similar documentation software. Begin by applying an optical character recognition software. You can use this to understand what type of information is displayed on the document, the keywords and also the language.

OCR can also be used for handwritten documents as well as printed text. So whenever you are sent a report or a document by an external stakeholder, you can instantly scan it and work with it online. Many of these OCR software also allow for redactions.

So if you have sensitive information, the software may allow you to cover it with black blocks. However, most good PDF or similar documentation software has this feature.

Implement a DMS

Working with a trusted accounting service really opens your eyes to the sheer amount of DMS options. These are document management systems. They are on cloud-based systems and they have a few features you may want to know about.

● When you scan documents, they can be automatically routed to a specific file or folder.

● Checks can be deposited straight into remote banks as well as into credit unions.

● You can sign documents using esigns, which allow for a virtual signature.

● You get your bills online for the service, so you can compare savings made regarding physical documents.

Moving on

Now that you are implementing a cloud-based system, organising your documents, signing them, routing them, using automation, you should officially move on.

Shredding your old paper copies might be a good idea. The keyword there is ‘might’. You should always keep hard copies of some documents. These will be any of the following.

● Lease for office space

● Contract, joint ventures, suppliers, distributors, etc.

● Employee contracts

Most of the others, you should shred. The storage space required to properly and safely store them is not worth it. Focus on the cloud-based systems you are utilising. Make sure their security is great, they have firewalls, data encryption and power generators in case of power supply issues to the building where the servers are housed.

Speak with staff

You may find that some members of staff are resistant to the fully paperless move. However, most accountants are going to prefer it because they have cross-platform access. They can work on documents at work, on their tablet at home and receive updates on their phone.

However some accountants might push back. Not everyone likes changes and even though going paperless clearly improves productivity and security, you need to convince people who have always done it one way, to adopt a new way.

This is why you should have a workshop, whereby you explain the new software, take questions and organize an onboarding program for employees. The training and learning can be outsourced but you should have a mixture of in-house training and outsourced learning.

If you would like to go fully paperless for your accounting needs, speak with us today. We would like nothing more than to answer your questions and show you the types of services we offer. Contact us today!

What Is the Purpose of an Accounting Service Company?

183:795740524 (Tariq Javed) — Fri, 13 Aug 2021 05:57:58 GMT

What Is the Purpose of an Accounting Service Company?

Finances and money can be confusing subjects to deal with. There are so many changes, rules that change on a regular basis and it can feel like a minefield when you are trying to sort things out like this yourself. So Accounting Service Companies are the perfect solution, experts in the field who stay up to date and know all the ins and outs of the industry and can make your money work more for you than causing you stress.

They are the solution to your money management problems. Perfect for the everyday managing, to entrepreneurs needing help with self-assessments and businesses which need books, advice and management on a daily basis.

There are different services available that can help you. From a personal point of view an accounting service company can help you with the stress of your self-assessment, making sure all your expenses are on there, all the numbers are correct and avoiding silly mistakes that can end up with fines.

They can also help with landlords and property accounts. Some landlords have more properties than they can keep on top of, so you can be drowning in paperwork for rental income, losses, works that had to be done to the property costing quite a bit of money and what your profits even are.

Things like this need to be managed correctly and as efficiently as possible otherwise you will end up confused with stacks of paperwork that you will feel like you will never be able to complete.

If you find you have come into some problems with money, and there is no need to be embarrassed it can happen to anyone. Account service companies won’t judge and will be able to help with all of your bankruptcy and liquidation needs.

If you find you have come under investigation with the HMRC, which does happen sometimes, highly trained professionals at an accounting service company will be able to advise you on the best way to deal with it and how you can deal with the issues that they have raised with any tax enquiries.

Accounting Service Companies can also help businesses with their financial needs as well. There is so much that businesses need to deal with and so many.

Just as confusing as it is for personal accounts on submitting tax returns it is even more so when they are business and corporate tax returns, working out what things can be expenses and what can’t, what length of times things need to be kept for and deadlines on when things need to be submitted.

It is always beneficial to have help and support from Accounting Service Companies as this is what they are there for. They are experts in their field and will be able to do everything you need when you need it. As well as completing and submitting Director personal tax returns to save you time.

Accounting Service Companies are there to make your life easier with the financial side of things. With businesses, they can also help with book keeping and general accounting. If you have employees in your business they can help manage the payroll side of things and the PAYE.

Accounting Service Companies are there to help as you are entering into the business world by helping with Company Formation and Business Start-Ups. When you delve into the business world finances can be very confusing and you may feel like you won’t know where to start so by seeking advice and assistance from an Accounting Service Company is the best thing you can do so you are starting in the best possible position.

With a lot of the businesses in the United Kingdom they are required to register for Value added tax (VAT), and collect VAT, but when you’re starting out as a new business you may not know the in’s and out’s and what you need to do with it. Accounting Service Companies are here to help.

They can give you advice so you know all about Value Added Tax. They can also tell you what goods and services need to have VAT included on. They will also be able to tell you if your business is eligible to register for VAT and how to do it.

Accounting Service Companies are there to make life easier and finances less confusing and hard to manage from personal accounts, landlord accounts, businesses and directors. They will be able to make your finances work for you and your business. Get in touch today.

Do I Need an Accountant for My Rental Property?

183:795740524 (Tariq Javed) — Mon, 26 Jul 2021 11:05:38 GMT

Do I Need an Accountant for My Rental Property?

It's a question that many people ask themselves when they are looking to start renting out their property. Do I need an accountant for my rental property?

It can depend on what type of entity you want to use. Still, in general, it is not necessary unless you have other complicated business dealings (such as owning another company).

However, if you are unsure how to file your taxes and do not want the responsibility, hiring an accountant may be worth it!

An accountant:

● Handles any property accounting tasks

● Carries out financial analysis

● Prepares regular reports of finances

How To Find the Best Accountant?

When looking for an accountant, their names should be in the Association of Chartered Certified Accountants records - this means that they have at least five years experience in accounting and have passed their exams.

An excellent way to find a good quality accountant is by asking friends or family members who may have had a good experience with one.

The Advantages of Hiring an Accountant

It relieves you of any financial stress. And a qualified and reputable accountant will be able to advise on what is best for your business at all times.

The Disadvantages?

Unfortunately, they are not cheap, but hiring an accountant could be a worthwhile expense.

How Often Should You Get Your Rental Properties Finances Checked?

Typically, you should check accounts once a year, and an accountant will charge differently for this service.

What Do Accountants Do When Auditing a Property's Financials?

Accountants will review your finances and give you a summary of what they do in any given year - this is usually on an annual basis.

Are There Different Types of Accountants?

There are three main categories: Associate (ACCA), Professional (CPA), and Chartered Accountant. The qualifications for each type vary, but if you're looking for someone to do your rental property accounting, then an associate is suitable.

Associate Accountant's Key Skills

-Have a good understanding of financial law.

-Ability to operate computer systems and use accounting software.

Professional Accountant's Key Skills

-Strong analytical and problem-solving abilities.

-Ability to work independently as well as with a team.

Chartered Accountant's Key Skills

The primary responsibility of a chartered accountant is not only on the accountancy side but also looking for ways to improve efficiency and productivity in any business or organization.

The chartered accountant is the highest level of qualification and has a broad range of skills.

What Should You Include in the Contract?

A contract for an accountant will typically have two parts - one part is the agreement between you, as the landlord, and your tenant, while the other section outlines what work they will be doing for you.

The contract should make it clear that the landlord will not withhold their consent as a tenant, which means they can't permit you to enter your property without consulting with you first.

You also need to outline the work and what type of reports and information an accountant is entitled to access. Finally, it's essential that both parties are happy with the contract.

It's vital that any accountant you pick is not only qualified but also experienced and reputable - it can be hard to find when looking for an accountant, so make sure they meet your needs!

Why Should You Hire an Accountant if You Already Have a Good Understanding of Taxes and Accounting?

If you have a good understanding of taxes and accounting, it might not be worth hiring an accountant. However, if you are unsure how to file your taxes and do not want the responsibility, hiring an accountant may be worth it.

What Happens When There Is a Mistake in Your Rental Property's Finances?

Accountants go through your finances year by year and look for mistakes. If they find any, they will notify you as soon as possible to rectify the issue.

Whether or not to hire an accountant is up to you, but it's important to know what your options are before going ahead with anything - here, the article has outlined what accountants do, how they can relieve financial stress and the pros and cons of hiring an accountant. Do you need a qualified accountant for your rental property?

Should You Use the Same Company or Person Who Handles Your Taxes, or Go With Someone Else?

It's worth considering what it would be like to work with the same person every year - they will have more knowledge of your finances and can help you plan for future tax-related matters. Do you think this route is best? Or should you go with someone else who knows less about your financial situation?

Remember, the most important thing when hiring an accountant is to find one that will work for your needs, whether you need someone who can do your personal and rental property taxes or just the latter. So do some research into what kind of accountant suits you best before hiring.

Are There Any Other Tax-Related Questions You Should Know About?

Taxes are an essential factor in renting out a property, but there are other things to consider. For example, do you know what your rights and obligations as the landlord are? Do you have an accountant who is knowledgeable about the rental sector, or do you need one that has experience in this area?

In general, it's worth taking some time to think through all of these questions so that when tax season arrives, you should be ready.

In conclusion, there are some aspects to consider when hiring an accountant. First, do your research and find out whether or not you need one for your rental property.

What services do accountants provide to small businesses?

183:795740524 (Tariq Javed) — Mon, 12 Jul 2021 15:43:44 GMT

What Services do Accountants Provide to Small Businesses?

One of the first and most important tasks you can outsource as a small business is your finances. Starting a business as a landlord is both exciting and stressful, without the added pressures of figuring out taxes and how you are going to pay your employees. Accounting services for landlords can help you manage your finances with ease.

When you make the leap to hire an accountant, the services that are offered go above and beyond just completing your tax returns. Your dedicated accountant will get to know your business, provide you with expert advice, support, and peace of mind while helping your small business grow. From company formation to payroll, find out below the services your accountant can offer to support your small business.

Support and guidance

When working with an accountant, you will have a dedicated team who will be available to answer any questions or concerns that you may have as well as provide your small business with important financial advice. The longer you work with your accountant, the more familiar they are with your business, finances, and taxes and can provide a tailored approach. Accountants go through rigorous training to become a specialist, so you will always receive high-level, expert advice. Accountants will be able to advise you on what requirements your business needs to meet to stay compliant, review your accounts, advise on how to run your business more efficiently and put strategies in place.

Business Startups

Right from the get-go, your accountant can be there to support your company formation or startup. The initial process involves many different aspects and can seem daunting to new business owners. An accountant will assist in the correct company registration and obtaining tax numbers, so you can start trading straight away.

Bookkeeping and Accounting

Regardless of the size of your business, accurate and compliant accounting and bookkeeping is essential to running your business. Keeping on top of your accounts keeps you compliant with legal requirements set out by the government, as well as provides you with an accurate picture of your business performance. A good understanding is vital to the success of your business, as it can show whether you are meeting your goals, what changes you can make as well as inform any current or future business decisions.

As your small business grows, so will its finances. A highly trained accountant will ensure all financial transactions are recorded compliantly via bookkeeping and reported and summarised accurately via accounting services .

Corporate Tax Returns

Filing corporate tax returns is another intimidating requirement that can lead to complications and a lengthy process if not completed properly. Corporate tax returns need to be compliant and error-free, to avoid costly penalties. An accountant can assist in ensuring all the information within the tax returns (including profit and loss) are completed to a high standard and are submitted on time.

Payroll

Paying your employees is important in the running of your business. An accounting firm can completely manage your payroll, also known as P.A.Y.E., to ensure the employees in your small business are paid on time and the correct amount.

Value Added Tax (VAT)

VAT is a part of our day-to-day lives. Every item that we purchase has VAT added to it. But when you are starting your own small business, it can be unfamiliar territory. Accountants can help you to understand what services or goods your business must add VAT to, how to register for VAT and how to collect VAT.

VAT is another complex process that can vary and affect your business in many different ways. For example, you may need to send extra funds to Her Majestys Revenue and Customs (HMRC), you may be able to claim the VAT back on business supplies or even increase your prices to include VAT.

Your accountant will be able to review your business and provide the necessary advice and services.

Bankruptcy and Liquidation

If it ever comes to the unfortunate event of bankruptcy or liquidation, your accountant will be able to help you navigate the complexities of the legal requirements and processes so you have all the information to take the right path for your small business.

The economy can be unpredictable, especially after COVID-19 which has significantly increased the number of insolvencies in the UK. Even with a good business plan and product or service in place, there are just some scenarios that cannot be avoided. An accountant will be able to advise on the steps you need to take.

Tax Enquiries

If for any reason your small business is under investigation or selected by HMRC for tax enquiries, your accountant will be able to provide guidance and support you through the entire process, prepare you on what to expect and what the possible outcomes or consequences may be.

It is not unusual for HMRC to run a check on your tax affairs to ensure you are compliant. HMRC typically looks into the taxes that you pay, your accounts and company tax returns, your self-assessment tax return, tax calculations, and PAYE records.

As your accountant will more than likely be managing all of these financial components of your business, they will be able to equip you accordingly and ensure you comply with their terms, to avoid any fines.

Hiring an accountant can be a great way to outsource the complex financial components of your small business, and relieve the burden off your shoulders. The services your accountant provides can benefit your small business in a number of different ways including saving you time and reducing liabilities.

When starting your own business, you will already have 101 different things to do and roles to play. Having to run your accounts and keep on top of tax requirements can be time-consuming and stressful. An accountant is equipped with specialist knowledge of finances and will be able to manage your finances completely, saving you more time and resources to put elsewhere in your business.

There is also a lot to learn when it comes to the finances of a small business. An accountant can ensure you remain compliant to avoid paying large tax penalties as well as guide you on the most efficient ways to run your business.

How much tax do I pay as a landlord?

183:795740524 (Tariq Javed) — Mon, 05 Jul 2021 11:38:19 GMT

How much tax do I pay as a landlord?

If you are a landlord, there are many things you need to consider when it comes to paying tax. Taxes can seem daunting at first, especially if you are new to being a landlord. Your taxes must be completed properly if you want to avoid any fines, large backdated bills, or even criminal prosecution.

There is not one simple answer to how much tax you should be paying as a landlord, as all business circumstances will be different. It is important to educate yourself on taxes and hire a specialist account to ensure you follow the correct guidelines. If you are unsure, it is best that you speak to your accountant or Her Majesty’s Revenue and Customs (HMRC) directly for more advice.

In this article, you will learn the basic tax requirements for landlords and a breakdown of how much you may need to pay.

What taxes do you need to pay?

There are a variety of different taxes you may need to pay as a landlord, including the tax on rental income, national insurance, capital gain tax, and stamp duty tax. The amount you pay will depend on the circumstances of your business, your profit, and the property value.

Rental income tax

Rental income tax is calculated from the profit that you make from your rental property. Your profit equates to the income received, minus any allowable expenses. The amount you will have to pay will also take into consideration your individual circumstances and how much income you gain each month from other sources, to ensure you are in the correct tax bracket. The tax bracket you fall into will be the same as other business and employment rates, for example, 20%, 40%, or 45%.

You are entitled to a £1,000 per year property income allowance when you rent out a property. This means that if the income from your rental property equates to anything up to £1,000 before expenses, you do not need to declare it or pay taxes on it.

If your total income from your rental property is between £2,500 and £9,999 after expenses or more than £10,000 before expenses, you must complete a self-assessment tax return . If your income falls between £1,000 and £2,500, it is advised to contact HMRC for advice.

If your allowable expenses are more than your income, then HMRC considers it a loss and you may not need to pay taxes. If you own more than one property, all your income from each property is collated to determine a profit or loss.

National Insurance

If your rental property profits less than £6,515 per year, a National Insurance payment is voluntary. Voluntarily paying your National Insurance taxes is beneficial to contribute to your entitlement of the full state pension.

If your profits equate to more than £6,515 per year, then you are obligated to pay Class 2 National Insurance tax. This is usually when you are running a business, renting more than one property, or your official, full-time occupation is a landlord.

Capital Gains Tax

If you are selling a rental property, you may need to pay Capital Gains Tax (CGT). This is usually when:

● The property is not your main home

● You used your main home for business

● Profit from the sale is above your tax-free allowance

The amount you pay will depend on your taxpayer status (basic or higher) and whether you claim any relief.

Stamp Duty Land Tax

If you purchase a property to rent, you will have to pay the usual Stamp Duty Land Tax as well as an additional rate of 3%. The amount you pay will depend on the value of the property you purchase, which you can work out using the Government Stamp Duty Calculator.

Deductible expenses

Before paying your rental income tax, it is important to understand what expenses you are allowed to deduct, to ensure you are paying the right amount of tax. Expenses can only be claimed if they are exclusive to the rental property and are considered a reasonable expense. Here are some examples of expenses you are able to deduct:

● Maintenance and repairs

● Insurance

● Letting agent fees

● Accounting fees

● Ground rent

● Legal fees

Expenses you are not allowed to deduct:

● Personal expenses

● Costs incurred from the property you live in

● Home improvement costs

● Mortgage payments

There are also many other expenses you are allowed to deduct, which your accountant can advise you on.

It is important to keep track of the amount and purpose of all your expenses including all receipts, to pass to your accountant as HMRC requires proof of purchase. Your expenses are usually reported on your self-assessment tax return along with your rental income.

When do you pay your taxes?

There are accounting services for landlords that will manage your expenses for you.

You have to claim your rental income and pay tax on the profits you make in each tax year, which run from 6 April to 5 April. Even in circumstances where you’re not paid until the tax year is over, you must still declare rental income for the tax year it’s due. Self-assessment returns are due 31st October for paper filing and 31st January for online filing, following your tax year.

For your first year of being a landlord, you have to register for self-assessment by 5th October to submit a tax return. Here you are provided with your unique reference number and have the option to choose paper or online self-assessment returns.

Most landlords, especially if you intend to build a business or property portfolio, will then engage in accounting services to manage their finances to ensure the taxes are filed and paid correctly.

It is important to familiarise yourself with the taxes that you may be required to pay as a landlord, to avoid any fines or criminal prosecution. If in doubt, always check with your accountant and HMRC to ensure you are paying the correct level of tax within the correct deadlines.

Do I Need an Accountant As A LandLord?

Sat, 26 Jun 2021 06:21:34 GMT

Do I Need an Accountant As A LandLord?

Medieval Castles, sprawling Estates handed down by title or goodwill, suburban three-bedroom brick and mortar structures, or even bachelor apartments in London all have the same opportunity for the Property Owner. Leasing out the property to an adequately vetted tenant for short or long-term possibilities in exchange for financial gain. The owner is henceforth known as the Landlord, if you will.

As you might know, being a Landlord is not an easy job at all. Firstly, you are required to adhere to several legal responsibilities when it comes to your property. In addition, you also need to guarantee the safety of the building by scheduling regular maintenance, of course. The ultimate wellbeing of your tenants and their loved ones rest on the shoulders of the Landlord too, and last but not least, them carrying out their financial responsibilities as stipulated in the Lease Agreement.

In the likely event that you may secure a tenant, you as a landlord must pay the required tax on the profit you make from renting out the property after taking into account any qualifying deductions for 'allowable expenses.'

What are allowable Expenses?

Let us have a look, shall we? Allowable expenses would be any amount you would have spent exclusively to rent out your property to tenants.

It would be expenses such as (but not limited to):

● The repair costs and maintenance in or around your property during the term of the Lease.

● The costs of supplementary services, which include landscaping and gardening services, ground rent to remain in good standing with the landowner, and cleaning services or live-in house staff.

● Electricity bills, gas refills, water rates, and council tax.

● Insurance premiums for your property and home contents.

Payable Tax On Your Income

On the property that you own, the first £1 000 of your income from renting out your property is tax-free, this, of course, being your 'property allowance.' It is noteworthy, however, to highlight the fact that when your rental income is between £1 000 and £2 500 a year, it is advised that you contact the HMRC and notify them accordingly.

In addition, if your rental income falls between the bracket of:

● £2 500 and £9 999 per annum, after allowable expenses naturally;

or if your rental income equates to:

● £10 000 or more per year before allowable expenses

You have an obligation to report it on a Self Assessment tax return .

Tax Return Deadlines

Do you know about the deadlines?

You must submit your tax return to the HMRC before specific deadlines; otherwise, you are at risk of paying penalty fees if you are late!

It does not end here, ladies and gentlemen. We have not even touched on how your taxes should be calculated, where or how to register, what you should keep on file, et cetera!

In our predominantly digital world today, there are fewer files and papers and delays and coffee-mug stains on invoices. We are more efficient in a way, yes. Having said that, there are still requirements to submit said information, albeit digital. It is a nightmare to remember on which Smartphone or tablet, or laptop all these documents are stored due to our evergrowing need for improved technology.

Your Best Solution

Therefore, it is highly recommended to join forces with a reputable accounting service provider for landlords and avoid finding yourself on the proverbial wrong side of the law!

By hiring an experienced and qualified tax advisor, you will not only sleep more soundly at night, but they will also undoubtedly help ease the burden by doing the heavy lifting and taking care of all your tax obligations by meticulously 'documenting' all the expenses relevant to the property. They will be the proverbial handyman on your financial and tax side of things. They will maintain your finances as well as your reputation with dedication and class.

A sure way to seize the next opportunity is to have a professional take care of the area they specialize in, which frees up time to invest in the next property. A little bit of TLC and the next set of Tenants can occupy with the Landlord ready to welcome them at the front door.

Property Investment

If you are thinking of investing in property for rental income, any property type will be a good investment opportunity. Just bear in mind that renting out one property is tricky, but renting out numerous properties is a different ball game.

A Landlord can easily manage the required tasks that go hand-in-hand with seasonal property maintenance and the odd burst pipe or two. Upkeep of the building and a coat of paint every five to seven years is manageable for sure.

Looking at the Investor with more than one property in his portfolio will surely necessitate a small team of skilled individuals to arrange said maintenance activities: a handyman, plumber, electrician, cleaner, or all-around property manager, to name but a few. Imagine the stress of running all of this and trying to keep track of all the snags, all the orders, all the invoices, and all the payments. Balancing your ledger is surely becoming a full-time job.

Financial year-end creeps up on most of us, and it just makes it so much easier to have a professional on your side. An extra pair of eyes and ears to assess and sign off on the legalities surely does come in handy.

It is already challenging to find good tenants, especially ones that appreciate the proper attention of a knowledgeable Landlord. The key to finding and keeping great tenants is to have a process in place to respond to their pressing needs when their daily life has been temporarily interrupted by the odd water leak. This will ensure that they respect the Landlord and the property they are renting and would surely think twice before relocating to a new house. A perfect scenario where one can count on future income and is already familiar with the occupants. Imagine the benefit of having a professional-looking after your finances as well as you are looking after your property.

How do I report capital gains on my taxes

183:795740524 (Tariq Javed) — Thu, 17 Jun 2021 13:23:46 GMT

How Do I Report Capital Gains On My Taxes?

For most, reporting capital gains isn't usually a concern. The vast majority of people do not exceed their capital gains allowance in any given year. However, if you have recently sold a home or a large number of stocks or shares you could be liable.

In this post, we take a look at how you can report capital gains on your taxes.

Reporting Non-Property Capital Gains

The UK tax authorities split capital gains taxes into two categories: gains made on property, and gains made on every other type of asset.

In 2021/2022, the capital gains tax threshold is £12,300. This figure is the amount of profit you are allowed to take on your capital without having to pay any tax. The amount above this will accrue tax.

If You Need To Report Immediately

If you make a capital gain, you may need to report what you owe immediately. You can do this using the government's Capital Gains Tax service.

To log in, you require a Government Gateway user ID and password. Don’t worry if you don’t have one yet: it’s easy to set up.

Once you report your gains to HMRC, you’ll receive a letter in the post or an email. This document will provide you with a payment reference and provide more information on how you can pay.

HMRC offers customers many ways to pay, including debit card, standing order, bank transfer and cheque. It also gives you the option of adjusting your reported capital gain at a later date if you made an error or omission. Simply give them your report reference number and then wait for an email update on your tax position.

If You Report Your Income Via Self-Assessment

If you report your income via self-assessment, you do not have to report capital gains immediately. Instead, you can include them on your self-assessment tax return for the tax year after the one in which you dispose of your assets. So for instance, if you made a capital gain in the year 2021/2022, you don’t have to report it on your self-assessment until 2022/2023.

If you’re not yet signed up for self-assessment, you can do so at a time of your choosing. However, if you plan on using self-assessment going forward (and not an agent, such as your accountant), you’ll need to begin the application process at least a month before your next tax return is due. Otherwise, HMRC may not grant self-assessment status in time.

Reporting capital gains on property after 6 April 2020

The government recently changed the rules regarding capital gains reporting on property. If you sold a UK residential property after 6 April 2020, you’ll need to set up a UK property account within 30 days of the sale.

Again, you’ll require a Government Gateway user ID and password if you don’t have these already.

Once you create an account, you can sign in and report any capital gains you make on properties.

If you are reporting capital gains on behalf of somebody else - for instance, a deceased relative - you can also use your Government Gateway account to report the gain on their behalf. All you’ll need is evidence that you can act on their behalf, such as a lasting power of attorney, and HMRC will deal with the tax through you.

Calculating Capital Gains

Before you report capital gains using any of the methods discussed above, you’ll have to calculate how much money you owe. Fortunately, working out CGT isn’t difficult.

First, you’ll need to collect information about the price you paid for income-generating assets you bought or sold, such as property, stocks or shares, and the dates for the transactions.

Capital gains taxes only apply to gains you made within any given tax year above the threshold. So if you bought an asset ten years ago and cashed in tax year 2020/2021, then it will count towards your capital gains bill and allowance this year.

Once you know the price at which you bought and the price you sold, you can calculate your capital gains tax.

HMRC requests that you itemise and provide calculations for every asset you buy or sell. This way, you can keep track of your actual tax position. You should also include other details too, such as the cost of disposing of assets and tax reliefs to which you’re entitled.

Ultimately, it is your responsibility to tell the tax authorities about any capital gains tax you may owe. If you are struggling, work with an accountant such as Smart Solutions Taxation & Accounting .

5 Things You Should Know About Capital Gains Tax

183:795740524 (Tariq Javed) — Fri, 28 May 2021 06:56:11 GMT

5 Things You Should Know About Capital Gains Tax

Capital gains tax is a tax that the government applies to a broad class of assets, such as stocks, shares, property, bonds, artwork, and other securities. You can think of it as a tax on passive income similar to the income tax you pay on active income.

However, because only a small minority of the population pay capital gains taxes on a regular basis, it can create some confusion. In this post, therefore, we list five things you should know about capital gains tax to help you both now and in the future.

The Capital Gains Allowance Is £12,300 In 2021-22

The capital gains allowance is analogous to the income tax allowance. You don’t have to pay any capital gains tax on gains less than £12,300. However, as soon as you go over this threshold in any given tax year, you incur taxes on the excess. So, for instance, if your capital gain is £13,300 in 2021-22, you’ll pay tax on the £1,000 above the £12,300 threshold.

The government has been periodically increasing the capital gains tax allowance over recent years. However, this year it froze the figure in an attempt to claw back lost tax revenue due to the pandemic.

Your Capital Gains Tax Rate Depends On The Type Of Asset You Sell And Your Tax Bracket

How much you pay for capital gains depends on both the type of asset generating the profit, and your tax band.

If you sell property (that is not your primary residence) and make a capital gain above the allowance and you’re a basic rate payer (you pay 20 percent income tax), then your capital gains tax rate is 18 percent. If you are a higher rate tax payer (40 percent and above), you’ll pay 28 percent on all gains.

If you sell any other asset (such as shares), you’ll pay 10 percent capital gains as a basic rate taxpayer and 20 percent as a higher rate tax payer.

You Do Not Have To Pay Capital Gains On Securities Held In A Stocks And Shares ISA

You must pay CGT on any capital gains from the sale of stocks and shares in a regular share dealing account above the allowance for the year in which you make the sale. However, this rule does not apply if you hold the securities in a Stocks and Shares ISA. These accounts are a life-time tax shield against any capital gains, regardless of how much your portfolio appreciates.

You May Not Have To Pay Capital Gains Tax On Employee Shares

Sometimes companies you work for will give you shares as part of your pay package. However, whether you have to pay capital gains on them when you come to sell depends on the scheme they use.

If you are awarded shares as part of a share-incentive plan (SIP), you do not usually have to pay capital gains tax. Upon receiving the shares, the tax authorities consider their current market value as the price you paid for them. So if you immediately sell them, CGT does not apply. However, if you hold onto them, the price rises and you sell them later, then you may have to pay tax. The same applies if you are on a save-as-you-earn (SAYE) scheme.

You May Need To Pay Capital Gains Tax When You Sell Certain Possessions

Economists define capital as any asset with income-generating potential. But the government doesn’t view things the same way. It also applies capital gains tax when you sell certain items, including collectibles, antiques, art, wine and other valuable items whose prices tend to inflate over time.

Capital gains do not apply to small items. However, you will be subject to it if the item sells for more than £6,000. Please note, though, that you only have to pay CGT if you go above your capital gains allowance. So, for instance, if you bought a painting for £1,000 and sold it for £10,000, that would imply a capital gain of £9,000. If your total capital gains from all your other assets for the relevant tax year was £0, then you would pay no CGT, since £9,000 is within the capital gains allowance.

You Do Not Have To Pay Capital Gains Tax On Wasting Assets

HMRC typically defines “wasting assets” as any asset with a life expectancy under 50 years. So, for instance, you don’t usually have to pay CGT on the sale of pleasure craft, wines and antique clocks, since these items depreciate over time.

What are Property Capital Allowances and how can you benefit?

Thu, 20 May 2021 06:45:15 GMT

What are Property Capital Allowances and how can you benefit?

Operating a property isn’t free. It comes with expenses - just like a regular business. For that reason, the government offers property capital allowances - an accounting tool that you can use to reduce your taxable income from property.

What Are Property Capital Allowances?

Property capital allowances are a form of tax relief for owners of commercial properties and furnished holiday lets. They let you deduct part or all of the value of certain business-related expenses from your taxable profits, thereby lowering your overall tax bill.

How Property Capital Allowances Benefit You

The government allows regular, non-property-based businesses to claim capital allowances on items they require to operate. For instance, firms can claim on items they use in their business, such as the cost of disposing of plant and machinery, integral parts of buildings, some fixtures and fittings, and alterations to capital items, excluding repairs.

Something similar applies to property-based businesses and companies. Just like regular firms, property owners who acquire buildings with productive fixtures attached, such as lifts, lighting and heating can claim relief. The government recognises that these features add value to the building and that, like regular capital expenses, they are necessary for the continued generation of income. Renters, for instance, would not be willing to use a holiday let without electricity or heating.

For commercial property owners, these allowances can yield substantial savings. For instance, businesses can subtract the cost of modifying integral features (such as escalators, air conditioning units, hot water systems, and electrical systems) from their profits. They can also reduce their taxable income by claiming for fixtures, such as fire alarms, CCTV systems, kitchens and bathrooms. In some cases, they may also be eligible for capital gains allowances if they are renovating business premises in disadvantaged areas of the UK, engaged in dredging, or altering the structure of their premises.

For residential property owners, property capital allowances are a little stricter. You can only make a claim if you run a furnished holiday letting business or the item in question is a common feature of a residential building, such as a desk in a shared reception area for a block of flats. If you generate income from a holiday home, you may only claim for capital allowances if you make the property available for let for more than 210 days per year and get renters for more than 105 days per year.

While the benefits for residential property owners are a little more restrictive than for commercial property owners, capital allowances can permit large savings on your overall tax bill from your operations.

Ultimately, property capital allowances allow you to lower your taxable profits, whether you’re a sole trader, partner, or limited company.

Property capital allowances can sometimes be a little tricky to understand, especially if you haven’t encountered them before. Only a small minority of applicable taxpayers are currently taking advantage of them, meaning that most are paying higher taxes than required by law.

Here, Smart Solutions Taxation & Accounting can help. With an experienced agent on your side, you can quickly determine whether you qualify for any allowances and whether you can lower your tax bill. Depending on how many qualifying capital purchases you’ve made, the reduction in the amount of tax you have to pay can be considerable.

How To Claim Property Capital Allowances

How you claim for property capital allowances depends on your HMRC status.

If you are a sole trader, you can include your property capital allowances on your self-assessment or ask your agent to include them in your returns.

If you are a partner in a company, then you can claim property capital allowances on your partnership tax return.

Lastly, if you file via a limited company, you must include a separate capital allowance calculation on your company tax return.

When filing for property capital allowances, you need to include information on when you bought the property. Include the date you signed the contract and when any payments on the property are due.

Capital Gains Tax Payable On Properties

Confusingly, property capital allowances and capital gains allowances for property are not the same.

If you sell a property in the UK, you may be liable to pay capital gains tax (CGT). CGT is a tax the government applies to the difference between the price you bought the property, and the price you sell. There is no tax to pay if you make a loss.

If you are selling your main home, you usually do not need to pay CGT. The government waives the CGT requirement if the property is your primary residence (you live there most of the time). However, you may have to pay a CGT bill if you are selling a second home, holiday home or buy-to-let property you own.

Currently, basic rate taxpayers (people earning over the 20 percent income tax threshold), pay 18 percent CGT on any capital gains they make when selling a property. Higher rate taxpayers (those earning over the 40 percent income tax threshold) pay 28 percent on their gains. If you are an individual, you can use the CGT allowance to shield the first £12,300 of your profits from CGT. And if you are a couple, you can combine your allowances to shield the first £24,600 from any gain. You’ll still need to pay CGT on gains over these thresholds.

Wrapping Up

In summary, property capital allowances are an accounting tool that allows certain types of property owners to reduce necessary capital expenditure from their taxable income. This, in turn, reduces their overall tax bill, improving their financial position. Commercial property owners can often slash their bills considerably. However, residential property capital allowances are quite restrictive. Regular landlords cannot usually claim them, except for shared fixtures in reception areas.

Only around 10 percent of eligible property owners make property capital allowance claims. That means that HMRC could owe you a substantial sum of money. As experienced accountants, we can help you determine whether you can make a claim and claim back overpaid tax.

Reasons To Hire An Accountant To Do Your Taxes

183:795740524 (Tariq Javed) — Thu, 29 Apr 2021 06:20:34 GMT

Reasons To Hire An Accountant To Do Your Taxes

Not everyone in the UK has to do their own tax return. In fact, the majority of people are paid using the PAYE (pay as you earn) system, which means their tax is automatically taken out of their salary and paid to HMRC on their behalf. The money they receive is the money they get to keep.

However, when you are self-employed, or if you run a business, you’ll need to deal with your taxes yourself. This is often the time of year that small business owners and sole traders dread; their tax return has to be filed by 31st January each year (and the money owed has to be paid by then too). If there are any delays, you can be given a fine, and this can soon add up.

Many people who worry about getting their taxes done on time will hire an accountant to help them. If you’ve never done this before and you think it’s a waste of money, you might want to think again when you realise just how much help an accountant can be. Read on to find out just some of the reasons to hire an accountant to help you with your tax and accounting services.

Taxes Are Complicated

One of the biggest reasons to hire an accountant to do your taxes for you is that taxes are very complicated. We’re not just saying that either; even the most straightforward tax return can involve plenty of complex calculations, and unless you’re an expert, this can all seem rather overwhelming.

When you hire an accountant, you won’t have to worry about learning tax codes and understanding why this number goes here and that one goes there. You can pass everything over to someone who spends all their time doing exactly this kind of work, safe in the knowledge that you can get back to doing what you’re good at.

Time Saving

Even if you do understand taxes and you’re pretty good at financial work, completing your tax return is still going to take some time. Many hours, in fact. And if you don’t find the work overly interesting, you might spread that time out over the course of days or weeks. In the end, you’ll spend a lot more of your precious time on this one tax return than is really necessary, and you’ll be less productive in the central core of your business as a result.

To save all this time and to allow you to concentrate on what you do best, hire an accountant. Because an expert accountant completes tax returns for a living, they will be able to do the work much more quickly than you ever could, ensuring that you save a tremendous amount of time and receive a complete tax return efficiently and quickly.

Financial Planning

Although you can hire an account to simply complete your tax return on your behalf, and although they will certainly do this very well, ensuring you don’t end up with a fine from HMRC, you can also speak to the accountant you have chosen about financial planning for you and your business.

Your accountant should be able to offer you advice to help with your financial future, enabling you to budget better and grow your business in the way you want to. Remember, when you’re self-employed, good financial planning is essential since it will impact not just your business but your personal life too.

Save Money

It’s true that if you complete your tax return by yourself, you won’t have to pay an expert to do it. However, this could be a false economy for a number of different reasons. The first is that if you make a mistake, you could be fined. That mistake might also lead to an underpayment or overpayment in taxes, neither of which is easy or quick to rectify. You might even open yourself up to an audit if you continue to make errors in your tax returns.

The second reason you can save money by hiring an accountant even if you are paying for their services is that they will know how tax laws work, and they will know how to reduce your tax bill legally, ethically, and correctly. Without this in depth knowledge of taxes, if you completed your tax return yourself, you could easily miss the fact that you can legally save money and pay what you owe without realising that discounts could apply. This fact alone is well worth the cost of an accountant you might want to hire.

Do I Need To File A Self-Assessment Income Tax Return As A Director?

Wed, 21 Apr 2021 11:16:06 GMT

Do I Need To File A Self-Assessment Income Tax Return As A Director?

Taxes are a necessary part of a functioning society. Without them, we wouldn’t be able to enjoy the services we used pretty much every single day. When you work and earn your fair share, you must ensure that a sum goes back into the community.

If you’re an employee of a business, then the chances are that you’ll go through the Pay-As-You-Earn system whereby all tax deductions are settled before you receive your wages. If you’re self-employed or own a business, then you’ll need to go through the rigorous vetting process of taxes yourself.

Here, we’re going to discuss whether you, as a director, will need to file a self-assessment income tax return and what the necessary steps might be. For now, let’s go through a few talking points.

What Exactly Is A Self-Assessment Tax Return?

A self-assessment tax return is a disclosure of your incoming and outgoings financially. You’ll have to share the revenue you made and the expenditures that were used in your work. Avoiding this kind of task will end in a penalty which could then lead to harsher punishments. You are not entitled to all of your profits as you must pay your dues. You’ll fill out all of your specific information and let HMRC know the exact numbers. They’ll then provide you with a fee that must be paid before the deadline. This can be done online – it is recommended that this be the way as it’s much quicker and smoother.

Who Must File A Self-Assessment?

A self-assessment must be filed by anyone bringing in money on their own accord. All revenue must go through the tax system. So, if you’re self-employed as a small business owner, a freelancer, or anything remotely similar, then you must file a self-assessment.

Is A Director Known As Self-Employed?

Typically, a director will not be seen as self-employed for tax purposes or any other kind of legal reasoning as they are an employee of a company. Other areas of life see them as self-employed, however. It’s all entirely dependent on the kinds of formalities and forms that are being completed.

So, Do I Have To File A Self-Assessment Tax Return As A Director?

As mentioned before, the criteria for a company director is that of a typically employed person. The chances are that their income will already be taxed at source like that of a PAYE employee. If you also have a small amount of savings interest or dividends below two-thousand five-hundred pounds, you probably won’t need to file a return. There will be lots of information on the gov.uk website if you feel as though you need to understand even more specific details.

How To Register For Self-Assessment

If, in the event that you must file a self-assessment tax return, it’s wise to know what actions must take place. As a director, you’re going to be listed as ‘not self-employed’. This means that you’ll need to register for a self-assessment using form SA1. This can be completed with HMRC online. It can also be completed via post, but, as mentioned before, it’s a lot smoother to do it online.

In order to complete form SA1, you will need to provide certain pieces of information. Once this has been completed, you’ll then be able to take further action.

You’ll need to input your full name and home address. Your national insurance number and unique taxpayer reference will also be included. Your phone number and email address will be necessary also in terms of contact.

You’ll need to input the date on which income was received from directorship. You’ll also want to include the date on which any other untaxed income was received – such as dividends, etc.

Once you have registered, you’ll get a letter from HMRC around a week later. It maybe be up to two weeks. It could even be three if you’re abroad. It will contain your unique taxpayer’s reference and information about your obligations linking to your self-assessment.

Does Everyone Have To Do A Self-Assessment Tax Return?

183:795740524 (Tariq Javed) — Mon, 12 Apr 2021 08:40:11 GMT

Does Everyone Have To Do A Self-Assessment Tax Return?

Whether you’re running a business or bringing in money from a side-hustle, you’ll have to correctly and appropriately file your taxes. Typically, if you’re employed, your wages or salary will already have tax deductions taken, so it’s not something to ever worry about. Those at the helm will have to ensure that appropriate action is being taken.

Here, we’re going to talk a little about self-assessments and who must do them in order to comply with rules and regulations.

What Specifically Is A Self-Assessment Tax Return?

It’s a tax return that one must complete each year. Sometimes known as a form SA100, the applicant will need to disclose their capital gains and income. They’ll also claim any applicable allowances and reliefs. It’s a legal requirement and a legal document. The applicant must not leave out any information or statistic as everything will be checked and audited.

Who Must Complete A Self-Assessment Tax Return?

A self-assessment is meant for anyone earning an income that has not yet declared and disclosed information regarding their finances. If you are self-employed, then you’ll have to complete a self-assessment. Regardless of whether you make a profit or a loss, you must inform HMRC about the financial record. The same applies for if you have income or gains outside of the UK. You’ll have to file a self-assessment if you’re self-employed, a partner in a partnership business, a minister, or a trustee of an estate. You’ll be able to find lots of minute, specific information on the government gateway website.

How Will Self-Assessment Specifically Work For Self-Employed People?

As a self-employed person, you have to include all of your income and gains on your return. Every piece of information must be included – this means employment income, overseas income, savings income, capital gains, and all kinds of different methods. The details of your outgoings must be disclosed, also.

You must complete all of the self-employment pages in addition to the basic tax return. If you earn under eighty-five thousand in that tax year, then the shorter pages can be completed. If you earn above, then the full pages will be necessary. These pages will disclose the details of the business income and various expenses. Once it is all completed, you will be given a figure that must be paid before the allotted deadline. You’ll be told how much Class 4 National Insurance and income tax you must pay.

How Does The Self-Assessment For An Employee That Has Foreign Income Or Gains?

Migrants working in the UK may have to complete a formal tax return each year. This will need to take place even if they are not self-employed and their entire pay structure is under PAYE . This will typically happen when they are a tax resident in the UK and have foreign income and gains.

What Records Should I Keep Hold Of?

When it comes to keeping records, the kinds of records depend entirely on your personal circumstances. One might need to keep a hold of records and comments that support their residence or information about foreign income and gains. Those with foreign income will need to keep them safe for at least twenty-two months from the end of the tax year.

At the end of the day, there is a legal requirement for people to keep records regarding self-assessment. There are so many specific details related to all kinds of different situations, and you can read up on the specifics when you enter the gov.uk website.

Are You Able To Get Out Of Self-Assessment Once You’re Committed?

If you are told to file a tax return but you feel as though you should not be eligible for one, then you can phone HMRC and ask for the tax return to be withdrawn. You can also then ask to be removed from the self-assessment scheme altogether. This can be the case if you feel as though your tax situation is no longer complicated or in need of specific disclosure. It’s wise to get in touch as quickly as possible. Once you are given the notice, you must complete it in time if the self-assessment is withdrawn – otherwise, you’ll have to deal with the penalties put in place.

If you feel as though you should not be completing tax returns any longer due to the ceasing of self-employment, then you will need to fill a tax return for the year in which your self-employment terminates. The same applies if you leave the UK. The exact date you left the UK or stopped being self-employed should be noted on the tax return. You must let HMRC know so that they can stop sending you returns to complete.

What is the Difference Between Tax and Accounting?

Thu, 25 Mar 2021 04:34:12 GMT

What is the Difference Between Tax and Accounting?

As a business owner, there are many things you need to think about. As you grow you will have more and more money come in and where you used to be able to deal with the finances yourself, you will have to look to a financial department to do this for you. You will also need to sort out your tax and accounting. These are two things that often get confused as people just bundle them all off to the finance departments. However, they are very different things. Here we explain the difference between the two.

What is tax?

Tax is something that everyone has to pay. If you own your own business then this is something that you will have to sort out yourself, but if you are an employee this will get sorted out for you. Tax is essentially a "financial charge" which is added to things that you purchase or is deducted from something that you get. Tax is collected for the purpose of the Government to spend on things that will benefit society. It goes towards things such as road works, the police and healthcare services, courts and general infrastructure. In the UK it is also put towards welfare benefits such as job seekers allowance. Tax is collected by HMRC and they are responsible for collecting and managing them. Most countries have a tax system in place and use a flat percentage rate of taxation on the amount that people earn. Taxes are involuntary fees that you have to pay and each person in society is responsible for doing so. There are three main types of tax and these are proportional tax, progressive tax and regressive tax. Proportional tax is where the same percentage of tax is imposed on everyone no matter how much someone might earn. Progressive tax means that those who earn more have to pay a larger amount of tax. As income increases, so does the amount of tax that a person has to pay. Regressive tax is where those on lower incomes have to pay a higher percentage rate of taxation than those that earn more.

What is accounting?

Accounting is one of the most vital parts of your business and is the process of recording all the financial transactions that take place. It could be handled by an individual, an accountant or a large finance department depending on how many financial elements there are that need looking after within the company. There are many different types of accounting that come under the term of " accounting " and these including financial accounting, managerial accounting and cost accounting.

Managerial accounting: Managerial accounting is a form of accounting that mainly focuses on the measurement, identification and analysis of accounting for business owners to make informed future decisions. It is designed to help managers to achieve business goals and help to get a better focus on cash flows, financial transactions, rate of return and any operating costs that the business might entail. Managerial accounting is important as it ensures that companies effectively perform the functions that they are designed to do. It analyzes data such as trend predictions and takes into account qualitative information that you cannot measure in monetary terms. This includes strength of research and development, industry cycles and development.

Financial accounting: Financial accounting is another form of accounting and is primarily focused on the transactions that take place within a business. It involves recording, summarizing and reporting on the different transactions that occur over time. From this, financial accountants will put together financial statements such as a balance sheet, income statements, cash flow statements and records on how the company has been performing over a set period of time. The reports that the financial accounts department must make are in the form of financial statements and can be distributed to those outside of the company. Because of this it is important that the reports are properly conducted. They must be made in accordance with the accounting principals in place to ensure they are properly regulated. Financial accounting can be performed with two main methods - accrual method or a cash method (or sometimes through a combination of the two.) Accrual means that transactions are recorded when they occur and therefore it is easy to recognize what the revenue is. Cash accounting is a little more complex and records transactions upon when cash is exchanged. This means that revenue is recorded when payment is received and expenses once payment of the obligation occurs.

Cost accounting:

Cost accounting is essentially cost control. It is the process of recording, analyzing and reporting both the fixed and variable costs of a company that is related to a product's production. The reason that it is in place is so a company can keep an eye on its budgets and spending accordingly, making sure it is running as efficiently as cost-effectively as possible. It allows companies to budget better, seeing exactly what is being spent where (such as utility bills), companies to be more efficient and therefore use this data to make more profit.

Accounting is vital for any business and is the way that you record what you have coming in and coming out. Without accounting you wouldn’t know how much profit you make in a year, whether you are doing better or worse month on month and could fall behind on any payments that you are due to make.

Tax and accounting are both different things but are both very essential for a business. Tax is something that every company out there is required to pay and is not something that is voluntary. You need to pay it otherwise you will incur large fines and be penalised for not doing so. Accounting is the people within your company (or that you outsource the work to) that sort out your taxes and other financial elements. They are integral to the smooth running of your business. Here at Smart Solutions Taxing and Accountants we are on hand to help you out with your taxes and accounts, please get in touch with us today.

What Services Does an Accountant Provide

183:795740524 (Tariq Javed) — Mon, 15 Mar 2021 09:28:13 GMT

What Services Does an Accountant Provide?

Accountants offer a whole range of services to help your business. From supporting you with your tax return to your bookkeeping, payroll management and tax inquiry and investigation, an accountant can help you with it all. In fact, an accountant can almost act as another employee within your business as they can give you advice on most of your financial decisions.

To help you with understanding what an accountant can do, below is a list of services they provide.

Tax Services

Your tax return is extremely important and it’s very important that it’s accurate with no mistakes. By hiring an accountant they will be able to help with your year-end taxes, finalizing your accounts. They will also be able to put strategies in place to help prepare you for your tax return, instead of having a shockingly large payment to be made at the end of the year. They will be able to advise you on items that you can expense and items that you can’t.

Support You With Your Bookkeeping

Bookkeeping is a fundamental part of every business. Through accurate bookkeeping, you will be keeping track of your business finances, from the money coming in, to your expenses and invoices. Nearly all accounting firms will be able to help you with your bookkeeping process and will be able to advise you on the best systems to do so. There are some systems that accountants specialize in allowing them to teach you the ins and outs of that system with great knowledge.

VAT Accounting

If you are earning over a certain amount then you will be required to pay VAT. Most accounting firms will be able to assist you with this, keeping you up to date with legislation and answering any questions you may have. They will assist you with making sure you are claiming back the correct VAT amount and that you are keeping accurate records. VAT is not always straightforward, giving you peace of mind that your accountant can you.

Landlords and Property Accounts

With many people looking to get on the property market, more and more people need support with their landlord and property accounts. To help you with this, you could turn to your accountant to provide support. Accountants can help with your insurance, maintenance, management, and the most important thing the tax you will need to pay.

Payroll Management

If you are new to employing people, then payroll can be something that gets confusing. If you aren’t confident on payroll then this is a service an accountant can provide. They can help support you with your payroll and make sure your business is following the correct legislation. If you want to pass payroll onto them completely, some accounting firms will be happy to offer this service and take it on. This allows you to focus on other areas of your business like improving your sales.

Tax Enquiries and Investigations

At one point in your life, you may be contacted by HMRC to provide proof of your tax returns . HMRC tend to do this at random meaning you could be selected at any point within the year. If this is to happen you can speak to your accountant to help you with the process. They will be there to help discuss the records that you need and provide them if they can. Your accountant will be there to make the process as stress-free as possible for you.

Bankruptcy and Liquidation

Unfortunately, not all businesses survive meaning at one point you could need support with bankruptcy and liquidation. If this is the case, then your accountant will be able to support you with this. By using an accountancy firm like ourselves, we can answer any questions you have and make the process be as smooth as possible. We can talk in detail about each step you will need to take and how this is going to affect you.

Company Formation and Business Startups

Once you have done all your research and are ready to start your new venture, then speaking to an accountant could be a great move for you. Using an accounting firm like ourselves, we can help register your company and let you know of any legislation that you will need to follow. Having an accountant there to support you is always useful as it can take some of the stress away.

Listen and Support You

One key area where your accountant can help you is by listening and supporting you. It may not be that they specifically list the service you require, but through a phone call, they may be able to help. There are so many different areas where your accountant can support you, that it’s always worth asking them if you are stuck - after all, running a business is difficult so you are bound to have financial questions that an accountant can help you with.

Deal with unpaid invoices

Cash flow is important to any business and one area that too often occurs is clients not paying their invoices on time. This is an area that instead of you wasting your time on chasing, your accountant can do this for you instead. Accountants can set up invoice systems to send out regular reminders to customers who haven’t paid you yet. Some accountants will go one step further and contact your customers asking for payment. Should payment not be received, they can then arrange for a debt collection agency to collect the payment for you.

Overall, there are a whole plethora of ways an accountant can help your business. If you are not sure how they can help, the simplest way is to give them a call. In fact, our team is on hand to answer any questions you may have regarding how an accountant can help you. So feel free to give us a call at any time. We would love to support you with ant accounting services in the UK

Have you recently launched a new business? How is your new business going? Let us know in the comment box below, we would love to hear from you.

10 Reasons Why Is Bookkeeping Important For Small Businesses?

183:795740524 (Tariq Javed) — Mon, 08 Mar 2021 07:23:44 GMT

10 Reasons Why Is Bookkeeping Important For Small Businesses?

As a small business owner, one of the most important things is knowing how your business is operating financially. Without this, you could be running your business blind and come into all sorts of financial trouble. Bookkeeping is so important as it will give you accurate information on how you are performing. Through regular bookkeeping, you will be prepared for your tax return, be able to track your profit and growth and make better decisions amongst many other things. Below we have put together 10 reasons why bookkeeping is important for your small business.

You Will Be Prepared For Your Tax Return

Every year there comes a time when your tax return will be due. When this tax return is due, there is normally stress of getting everything together and finalizing the details, and working out how much is due. By bookkeeping , you are able to keep track of your finances year in year out and know every month how much tax you should be paying. This means there is no large tax bill that comes at the end of the year that will be a shock. If you are ever required to send your documents in, by keeping an accurate record, you can easily send all the information in as proof of your earnings.

Accurate Picture Of How Your Business Is Doing

It’s important to know how your business is doing financially. By regularly updating your accounts, you will have an accurate representation of what’s coming in and what’s going out. This can then help when making future business decisions. Without knowing, you may feel that you are making plenty of sales and are doing well, but not realizing your costs are high meaning your profit isn’t as big as you thought.

Track Your Profit and Growth

Through accurate bookkeeping, you are able to easily track your profits and see how your business is growing. Many systems will allow you to pull reports of the system which will give you a month or yearly information on how you are doing. By having a report it’s easy for you to identify the good months of the year, the bad month and analyze why you were having a bad spell.

Improves Decision Making

As you can imagine it’s a lot easier to make a decision when you have the number and facts in front of you. Bookkeeping allows you to keep your finances in order, meaning you can go to a board meeting and discuss factual numbers. Without, you could be making decisions on what you think is happening when in reality, this may not be true.

Reduce Stress

As a small business owner, it can be very stressful being your own boss and making all the decisions - especially if you have employees that you look after as well. However, one stress that can be relieved is your financial worries. If you are doing well and your financial statements are up to date, backing this theory, you can go to bed feeling less stressed knowing your business is in a good financial position. If you don’t prioritize your bookkeeping how can you possibly know where you are financially which could lead to an increase in stress.

Helps Your Budget More Accurately

Bookkeeping should be an integral part of all business operations. By regularly bookkeeping you will find budgeting to be a lot easier. Through regularly updating your accounts you will have your income and expenses organized correctly, allowing you to review what your business is doing. Through these statements, you can easily budget for future income and expenses. This will help with the growth of your business and allow you to predict a more accurate future with relevant information, instead of guessing.

Organization

As a small business owner, your organization is key to running a successful business. You do not only want your financial records organized, but also other areas of your small business as well. By regularly bookkeeping, you will be organizing your finances, getting a better understanding of how you are doing. By doing so, you’ll be able to locate certain financial information easier should it be required.

Required By Law

Simply put, accurate finances are required by law. So by bookkeeping, it’s a lot easier to keep track of how everything is doing accurately. If your process is not smooth things can get missed which could lead to fines and you getting in trouble. Should you get audited, by having a good bookkeeping process in place you will be able to find the documents that they are requesting easily.

Better Cash Flow

Bookkeeping is an extremely important part of knowing where your money is coming from and if anything is outstanding. If you are bookkeeping correctly you will know if any invoices are still due and any information about that invoice, for example, the due date, customer name, and contact details. By knowing this information you can decide how much cash you should have on you at any point in time.

You Learn In The Process

When bookkeeping you will be learning the processes each time you do it. This is important as it will not only help you grow as a person, but it will help teach you best practices when it comes to accounting. The more you learn the smarter and more aware you will become when making financial decisions based on the information presented to you.

The above ten points are only a touch on a large list of why bookkeeping is important for small businesses. But if there is one thing to take from the above is that accurate booking is essential and will be a big part of your business’s future success. Not everyone is an expert when it comes to bookkeeping and if you need any support you can hire accounting and bookkeeping services for small businesses, like ourselves. Our team is always here to help you with any finances questions you may have. J

Why do you believe bookkeeping is important for small businesses? Can you add any points to the ones above? Let us know in the comment box below, we would love to hear from you.

How Much do Accounting Services Cost?

Thu, 11 Feb 2021 08:09:46 GMT

How Much do Accounting Services Cost?

Whether you’re newly self-employed or an established business owner who has been left confused by the financial implications that coronavirus has had on your business, hiring an accountant to handle your tax returns and other money matters is probably a very appealing prospect. Before looking for professional accounting services, though, you must first discover how much they will cost.

Here’s everything you need to know about the cost of accounting services for UK businesses and sole traders.

Why accountancy firms do not charge a set fee

If a friend were to ask how much a trip to the salon or hiring a building construction team costs, the answer would be ‘it depends what service you need’. Appointing an accountant is no different.

As a client, you should be looking for the best accounting services at the best price. Therefore, you must understand and appreciate the various factors that can influence the costs. They include;

● Are you a sole trader or business?

● Will the accountant simply do your tax returns, or handle other items like PAYE?

● How many hours are needed to complete the work at hand?

● How quickly does the work need to be completed?

● Does the business work exclusively in the UK or also use international trade?

Due to these (and other) contributing elements, the costs may contribute greatly from one account to another. Similarly, the choice of accountant can influence the cost as experience and reputation come at a slightly bigger cost but will also give you the best chance of securing sizable tax deductions due to the increased knowledge base.

Ultimately, then, you should probably avoid any service that charges a ‘one size fits all’ package. Aside from anything else, it will mean you’re paying for services that aren’t actually needed.

So, how much should be paid for accounting services?

While a good accountant will build packages tailored to each client, it’s still worth knowing the ballpark figures that you can expect to encounter. First and foremost, the best firms won’t charge by the hour. Instead, they will build a price for the job.

When you are a sole trader looking to have your self-assessment completed by an accountant, it is likely that you’ll pay around £100-£150. This is unless you have a particularly complex case, in which case it may creep up into the £200-£300 category.

Many clients find that it makes sense to appoint an accountant on an ongoing monthly basis. When this is the case, your working status will dictate the costs you may expect to pay. As a rule of thumb, the following data is fairly accurate;

● A freelance contractor may pay £50-£150 per month for an accountant to complete their accounts, handle VAT forms, bookkeeping , self-assessment returns, payroll, annual submissions, and filing to Companies House.

● A sole trader or partner of an unincorporated company may pay £40-£140 for an accounting service that covers their accounts, VAT forms, bookkeeping, self-assessment returns, payroll , and annual submissions.

● Property landlords can expect to pay £100-£200 for an accountant who will handle personal taxation and corporation taxation elements for one property. The price increased for additional properties, but the price per unit decreases.

Owners of limited companies could pay as little as £100 for their accountancy services, but could also pay thousands per year if it is a larger company. The accountant can provide business accounts and submission, PAYE, self-assessment, VAT forms , Companies House filing, and associated administration costs.

How to get the best value for your accounting services

The above estimates are linked to certified and chartered accountants that hold memberships to IFA (Institute of Financial Accountants) or equivalent firms. It may be possible to reduce your costs with a student or newly qualified accountant, but cheap should not be confused with value. After all, a great accountant could save you thousands through tax savings and financial management.

Nonetheless, there are several ways to help bring your costs down when working with the best accountants. They include;

● Use an accountancy software package to record and organise all receipts and invoices.

● Arrange for an accountant to work on your case long in advance of the tax returns deadline.

● Embrace a full consultation service to ensure that the package is built around your needs.

● If applicable, provide historical data of the tax returns completed in previous tax years.

The fact is that, unless you are simply filing a self-assessment, the ongoing accounting services firms will cost you a few thousand pounds each year. However, the right accountants will actually pay for themselves by putting your finances in much better health - not to mention the time savings.

Discover how much your accounting services will cost today by arranging a free consultation at Smart Solutions.

A Guide to Completing Your Self-Assessment Tax Return

Thu, 28 Jan 2021 22:18:47 GMT

A Guide to Completing Your Self-Assessment Tax Return

If you are one of the UK’s five million plus self-employed workers, the self-assessment tax return deadline is rapidly approaching. By 31st January you will need to have completed the submission and paid any monies owed.

Whether it is your first return or the first year that you have made the switch to online submissions, it is imperative that you familiarise yourself with the process. Otherwise, the confusion could lead to inaccurate or incomplete submissions. Frankly, that is the last thing you need, which is why the following guide is just for you.

Step 1: Setting up your account at HMRC

Self-assessment tax returns are required by anyone who earn through self-employment activities, from rental property income, or from investments and savings. There are also other reasons to submit a self-assessment, such as claiming back tax relief from pension plans. Whatever the reason, your first step will be to register for an account.

This is done via the gov.uk website, although there are slightly different registration processes depending on the reason for needing to file a return. You will need to supply details about yourself, address, and National Insurance details. Once you’ve completed the process you’ll gain a confirmation with your;

● Username

● Password

● UTR (unique tax reference code)

When you sign into the gateway, you will usually have to complete a two-step verification. Once this is done, you can begin your return.

Step 2: Preparations

Before filing your tax return, you will need to ensure that you have all the relevant documents and information to complete your tax return. As well as your UTR and National Insurance details, you will need;

● All details of payments and untaxed income,

● All details of any dividends and interest on shares,

● Full records of any expenses from the tax year,

● Record of charity and pension contributions for tax relief,

● Records of any taxed income, such as a P60.

It is also worth reading the help sheets available on the gateway site and watching HMRC’s videos on the matter.

Step 3: Completing your self-assessment

Once you have clicked the button to start your new self-assessment, the Gov UK website will take you through the process through a selection of pop-up windows. Meanwhile, each section is clearly signaled on the dashboard with a tick to confirm it has been completed. If confused at any stage of the procedure, there are ‘?’ links to provide assistance.

The self-assessment is broken into two sections, SA100 and SA200. The vast majority of people only need to worry about the former, which covers the following areas:

Income

The first part of the self-assessment application is to input all relevant data regarding your earnings during the previous tax year. This includes tax and untaxed income from interest earned from dividends and shares.

You can add a total figure for invoices covering all clients billed within that 12-month period rather than adding them all individually but will need to calculate the figure to do this.

Pension contributions

For retired claimants, it will be necessary to enter the State Pension entitlement, State Pension lump sum, lump sums and annuities from non-state pension plans.

If you are (or were) on benefits during this period, you will have to include the total received via Jobseeker’s Allowance or Incapacity benefit, as well as taxable benefits from Bereavement Allowance or Carer’s Allowance.

Other income and deductions

In this section of the application, you will add details of all additional unrelated income that should be taxed via supplementary sheets.

Following this, you will add the income and deductibles of charity donations, registered pension contributions, student loan repayments, marriage allowances, and blind person’s allowance.

Step 4: Completing additional pages

Once you have completed all sections of the SA100, you may have to complete one or more of the following;

● SA103 for supplementary self-employment,

● SA105 for property-based revenue,

● SA108 for capital gains.

The SA200 will only need to be completed if HMRC actually contacts you about it. So, for now at least, you won’t need to worry about it.

Once all of the sections have been completed, the portal should provide a PDF summary that can also be printed. This will detail your income and tax deductions (in sections), followed by the details of payments that are required in January and July.

The payments will have a breakdown of tax, National Insurance and additional features like student loan contributions, if applicable.

Still want help?

If that all sounds a little confusing (or just too time-consuming between now and January 31st), there is another way. Hiring an accountant to prepare and complete your tax return will allow you to bypass almost all of the work. Simply provide your self-employment data along with your invoices and receipts, and your accountant can do the rest - although you will obviously receive regular and clear communication throughout.

To find out how an accountant can complete your self-assessment in the coming days, get in touch with Smart Solutions today!

Why you should appoint an accountant for your tax and accounting

Thu, 14 Jan 2021 19:46:50 GMT

Why You Should Appoint an Accountant for Your Tax and Accounting

Whether you’re a self-employed sole trader or the owner of an SME, you’re probably debating whether to go down the DIY route or hire professional tax and accounting services . While the former option may sound appealing, especially if business is slower than usual due to the pandemic, appointing an accountant is almost certainly the way to go.

In truth, the reasons for taking this route are near endless. Here are six of the best.

#1. Financial savings

The chief reason for resisting the professional route comes from the perceived financial savings. After all, not paying a few hundred pounds for an accountant’s time will have a positive impact on your cash flow. Right? Wrong.

While an accountant will charge you for their time, they will also generate significant savings on your behalf. Their knowledge of tax deductions, as well as financial support that may be available due to the current pandemic, will yield savings that easily outweigh their fee. In fact, even their work is tax-deductible.

For the sake of your bottom line, appointing an account makes a lot of sense.

#2. Time savings

Right now, business might not be booming. However, that doesn’t mean you have time to waste. On the contrary, you’ll need to focus your energies like never before as you look to come through this difficult patch. Distracting yourself with tax returns is far from ideal.

An accountant may be able to complete your returns in a few hours, but it’ll take you twice as long. Moreover, you’ll still probably miss out on a few tax deductions. Crucially, though, it will stop you from actively working on the business model. Worse still, the inevitable stress it brings can cloud future decisions.

Time is your most valuable resource. If an accountant can help maximize yours, embrace it.

#3. Avoid taxman hassle

First and foremost, HMRC wants businesses and workers to file their taxes. Nonetheless, in an ideal world, they’d probably rather everyone filed through a certified accountant. Aside from increased organisation, it ensures that everything is above board and accurate.

With this in mind, you are more likely to receive a visit from the taxman to verify the legitimacy of your receipts and other features. Even when you have nothing to hide, this is a time-consuming and stressful process. As such, it would be far better to avoid it altogether. Submitting via a certified accountant should do this.

And even if they do want to speak, you can advise them to go through your accountant.

#4. Help beyond accounts

When you think about an accountant’s role, you primarily consider tax returns and filing accounts with Companies House. In reality, their expertise can extend to an array of different aspects, such as PAYE and interactions with HMRC.

The fact that accountants can also run a full audit of the business is telling. Their insight has the potential to tighten your purse strings during this important period without compromising your output. Using a service that offers audits, staff accountants, project accountants, and more can truly transform your approach to business.

Once you combine those services with the core tax features, their value is even greater.

#5. Support future financing

The immediate benefits of using an accountant are plentiful. However, the impact on your long-term future should not be overlooked either. Accounts will be prepared correctly before being presented in a binder. This official status can serve you well in later years.

While you may not need to worry about this right now, there is a strong possibility that you’ll seek financing through a bank loan or private investors at some stage. When you make an application, the accounts will aid your cause. Once again, their advice could be vital as they’ll ensure that you’ve taken all issues into account.

Given that future financing could save your firm or facilitate an expansion, this feature is key.

#6. Peace of mind

Finally, there is no doubt that appointing an accountant or accountancy firm will deliver confidence and peace of mind. When you take the DIY route, a cloud of self-doubt will circle overhead long after you’ve submitted your returns.

Likewise, you’ll be left wondering whether improvements could be made in various aspects of the business. Working with a professional team of accountants that are passionate about helping UK businesses will allow you to put those fears to bed. Smart Solutions is the only answer you need.

Take the first steps by arranging a free consultation today.