What are the tax implications of Brexit? That’s a mvoing feast, however currently there will be no immediate changes to the legal and regulatory environment. In any event tax has always been a competence of the member states subject to a unanimous decision by all those member states. Cloud Accounting NI considers below some of […]
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Our (hopefully) insightful ramblings…things that occupy our mind!
Tax Returns – Don’t put them off! HM Revenue & Customs (HMRC) are in the process of writing to taxpayers to remind them that they need to file and pay their 2017 self assessment tax return on time (by 31st January 2018). Despite HMRC’s best endeavours, taxpayers often put off preparing their tax return until […]
Currently, there is a highly favourable environment for businesses and those who invest in them. In addition to the growing diversity of sources of finance, such as crowdfunding and peer-to-peer lending, there are tax relief schemes and small business incentives devised to help companies of all sizes secure funding. If your business meets certain criteria, it may […]
Many people, and businesses get confused over what the terms “bookkeeper” and “accountant” mean. They often get confused by the two or believe there is no difference between them.
However, there are a number of differences in the role of each one and confusion as to what they do could cause problems for many businesses, especially if they were to employ the wrong professional for the wrong role, or neglect the importance of one of the tasks:
SEPARATING THE TWO
Whilst bookkeepers tend to be used on a day to day basis, the role of an accountant is much less frequent. A bookkeeper will keep the daily or weekly financial records of a business. S/he will record all incoming monies, outgoing expenses and invoices, and will ensure that the books match the bank accounts.
An accountant then studies those books and provides advice on the best way for the business to proceed financially. The data they assess from the books can be interpreted to consider which way the business should progress in order to maximise their profit levels.
The Role of a Bookkeeper
Many businesses, depending on their size and structure may employ a bookkeeper, either on a full time, part time or “ad-hoc” basis. The bookkeeper will look at all incomings and outgoings and enter them into a ledger, known as a book.
Bookkeepers have a number of legal obligations. They must act honestly and with good faith in order that the books are kept up to date and honestly. Their process is completed when the certified bookkeeper performs a series of final checks known as a “trial balance”. Following the completion of this step of the process, they will hand the books over to the accountant.
Bookkeeping is vital to have a permanent record, kept in a straightforward manner which can then be later examined.
The Role of the Accountant
Once the bookkeeper has finished their stage of the bookkeeping process, the role of the accountant then begins. The main task of the accountant is in the analysis and reporting of the company accounts. They will be able to see from the carefully kept books what is working and failing for the business. Accountants insight can helps the business become more successful
The accountant will also be responsible for submitted the tax return and evaluation the position on tax. This will ensure the business is legally compliant. Accountants will also try to legally minimise tax the business has to pay.
Businesses often think they can do without either an accountant or bookkeeper. However, without the use of a bookkeeper, a bookkeeping organisation, or an accountant, the business would not be able to meet their legal obligations, could be subject to paying too much (or too little) tax and could potentially lose money as cost efficiency is a role undertaken by the accountant.
CLOUD ACCOUNTING NI PROVIDES THE SOLUTION
At Cloud Accounting (NI) we have a unique process to automate the Bookkeeping process in house in a highly cost effective manner. In other words we can act as BOTH your Bookkeeper and your Accountant. Alternatively, we can work alongside your existing Bookkeeper (either in your business or external) using an online accounting system.
Using our unique cloud accounting process, we have ‘real time’ information on hand to help you grow your profits, reduce your tax and save on IT costs. Every month, every three months, or at a frequency that’s suits your needs, we can sit down with you to discuss your business results and put forward target driven recommendations to help improve it further.
For further expert advice, message us.
HMRC Business Record Checks programme is designed to ensure that small business owners are keeping their records up to date. HMRC wants business owners to pay the right amount of tax at the right time.
Don’t put off the paperwork - keep your books up to date
The most important thing you can do is to make sure that your business books are updated regularly. This isn’t just because HMRC require you to, but it’s also essential to know where you are in your business. When your records are up to date, not only can you pick up on crucial information quickly. You can also easily respond to any HMRC enquiries without the stress of searching for scraps of paper!
To make sure your books are up to date, ensure that:
- your bank account balance matches the balance in your accounts.
- you have issued and kept a copy of invoices for all money received.
- you have copies of receipts for all costs in your business. Remember that in most cases HMRC will accept scanned receipts instead of hard copies!
Online Cloud Accounting systems can really make the above three processes much more efficient and easy to handle.
Avoid accounting errors that trigger an automated HMRC Business Record checks
Unusual activity in your tax records or accounts could flag you up for HMRC review.
While some HMRC checks are entirely random, most are triggered by HMRC’s Central Risk team. They use sophisticated data mining tools to spot unusual activity on accounts, or trends in particular industries. For example, HMRC detects companies with activity that falls outside the normal parameters in their industry.
To keep HMRC’s systems happy, it’s important to keep your records up to date and as error-free as possible. If you’ve had a problem lurking in your books that you’ve been vainly hoping would just go away, now’s the time to ask your accountant for guidance or contact HMRC to sort it out. To keep the errors at bay and save time, try automating some of your day-to-day bookkeeping work..
File your tax and VAT returns on time
HMRC Business Record Checks are more likely to happen when your tax filings late. Making sure you’re staying on top of your tax obligations can help.
When HMRC is happy, you’re happy too!
One of the best parts about staying in HMRC’s good graces is that your business will benefit from tidy, up-to-date records. You’ll not only be ready if HMRC has an enquiry, but you’ll also know how your business is doing on a day-to-day basis.Otherwise you're waiting until the end of the month, quarter, or even tax year to find out about any problems.