ADVICE & INFORMATION FOR CLIENTS
This booklet has been written for your guidance and assistance.
You have probably heard about HM Revenue & Customs’ investigations procedure, which can be very nasty. But if you back us by carefully doing all we advise in this guide, we should have no problems coming out with a “Clean Bill of Health” every time they check your books.
We are always pleased to see new clients, however much of a mess their books or tax situations are in, provided they want to get straight and stay that way.
We now offer specialist services for the following categories of clients: -
1.Overseas clients with property let out in the UK.
2.The Construction Industry and Landscaping trade.
3.Exporters and Export Trading houses (we are on the Export Register).
4.Firms wishing to computerise their accounting records.
5.Firms requiring assistance to Bank Support purposes.
6.“All the Finance Director you want, without the need to employ one”.
8.Income Tax refund claims.
11.New Business start-ups.
We can supply you with a QuickBooks or Xero free trial to enable you to see if it suits your needs.
BOOKS AND RECORDS
Every business has different needs, but, however simple or complex the affairs, it is essential that books are kept up to date.
In the case of a self employed individual who is basically labour only, be they ground worker, master plumber, designer or doctor, a simple weekly record book is often adequate.
The records created by cheque stubs and bank statements are the basis of most business records and a clearly completed cheque stub can save a book entry in the case of smaller businesses. It is still helpful to keep all invoices/receipts.
For all clients, we must see at least:
1.Bank statements, cheque stubs, paying in slips, etc.
3.Credit card statements.
Remember that the HM Customs & Excise demand to see copies of all these items even if you lose the originals, so make sure we have them first.
4.Bills for everything. The Tax Inspector will not expect bills for parking at meters, car washes or launderettes, and will accept what you record in your book if it seems right. It is to be expected that some bills will get lost or mislaid, but if your purchases are also supported by a cheque stub or record book entry, a few missing bills are no great problem.
Please take your paperwork seriously as it is your money. If you don’t know whether something is tax allowable or not, put it in your book anyway and we will sort it out at the end of the year.
UPDATE YOUR BOOKS OR COMPUTER EVERY WEEK, and, to help jog your memory, go through the checklist below as you do so:
1.Bus and train fares, e.g., to trade exhibitions or when car is off the road. Accommodation away.
2.Car washes, polish, leathers, parking, repairs, AA, MOT, tax, tolls, insurance and fuel.
3.Pens, pencils, notebooks, calculators, postage, batteries, trade magazines and possibly daily newspapers.
4.Advertising and promotional expenses, printing.
5.Wife’s wages, children’s wages (e.g. for car washing or Saturday help).
6.Telephone bills, mobile phone and coin box calls, together with Bulletin boards and broadband.
7.Hire of tools, equipment, cars or vans.
8.All trades stock and materials, even small items.
9.Protective clothing – overalls, wellingtons, waterproofs, uniforms or costumes and suits.
10.Cleaning materials, especially Swarfega, soap, cloths.
11.Work clothes, launderette costs or uniform dry cleaning.
12.Tools including small renewals such as blades, nibs, etc.
13.Trade hardware e.g. expanding rules, Billy cans.
14.Tips and casual wages. For anyone you pay over £10 in one week, keep a note or their name and address.
18.Hire purchase or lease agreements.
BARCLAYCARD OR VISA: Use one or the other just for train fares, petrol and car requirements. Its keeps track of things if you attach bills to the monthly statement.
BANKS: Use your cheque book and put all your income into the bank. Failure to do so makes the Revenue suspicious.
BANK & BUILDING SOCIETY DEPOSIT ACCOUNTS: Are ideal for saving up for annual bills, such as tax, road tax, car insurance, accountant, etc.
1.PAYE/NI - Good records are vital. You now have to operate “Real Time Payroll”. Every single payroll run must be reported online to HMRC within three days or you will be fined.
2.Subcontractors with exemptions:
a.)Keep a photocopy of the subcontractor’s exemption card and make sure you inspect it. If you have any doubts, ring us and we will have it checked out by the Tax Office.
b.)Make a note in your book of the person’s name, address and amount you pay. Note the serial number of the exemption certificate you are given. Remember there is also the subcontractors’ Annual Return to be made.
c.)Read and understand the Inland Revenue’s booklet on the exemption scheme. If you are in any doubt, call in at any Inland Revenue office and ask them to explain it to you (they won’t charge you for this service).
d.)Pay by cheque or bank transfer to ensure that all income is shown through the subcontractors’ bank account.
3.Subcontractors without exemptions.
NEVER PAY “CASH IN HAND”
a.)If you think a “cash in hand" person won’t tell on you when they are eventually investigated, you probably think pigs can fly.
b.)Ring the Inland Revenue to ascertain the level of tax you need to deduct from the Subcontractor, usually 20% or 30%.
If you are out of work, notify the Department of Work and Pensions as you may be entitled to some supplementary benefits. The self employed do not qualify for unemployment benefit or job seekers allowance.
Statutory Sick Pay (SSP) and State Pension are what your National Insurance contributions pay for. If you are sick, get a certificate from your doctor, fill it in and claim the statutory entitlement.
This is especially important where you have more than a few weeks off and consequently your taxable earnings are a bit low. It is important to keep a record of any Statutory Sick Pay or benefits you receive.
If you employ staff, do you understand Statutory Sick Pay? If not you may be losing out to the Government’s advantage. Contact us for guidance.
It’s a disaster to get behind. The bill always comes when you can least afford it, and for people in construction, it is grounds for HM Revenue & Customs to take back your Exemption. Arrange to have your payments paid straight from your bank on a monthly basis. Please contact us for the relevant forms.
According to Government statistics, some 60% of the working population do not have a private pension. Are you one of them? With changes in pension rules, you may be eligible to pay into a pension and borrow the money back out again to fund the expansion of your business.
Six months before renewal date you should get a renewal application form from the Tax Office. The countdown is as follows: -
5 months to go Ring Tax Office
4 months to go Ring Tax Office weekly
3 months to go Visit Tax Office
2 months to go Tell us
1 month to go Panic
Many small firms are finding it profitable to act as importers and exporters. However, they often fail to understand E.G.G.D., Letter of Credit, Bills of Exchange SITPRO, Bonding etc. Fortunately we do. We are Registered Consultants to the Department fir Business Innovation + Skills and Institute of Exports and we have contacts in the banking systems to assist our clients in obtaining funding/payments.
We keep our overheads to a minimum but do not make low fees our first target. The quality of work and client care is, in our view, far more important.
The standards demanded of the self-employed by the HM Revenue & Customs are getting higher all the time and we aim to keep you ahead of them.
Your annual fee depends on the amount of work involved and includes: -
1.Writing up records weekly/monthly/quarterly/annually.
2.Preparation of annual accounts.
3.Assistance with Tax Returns.
4.Advice on tax, HP, leasing, mortgages, loans and investments.
5.Completing company forms and returning same to the Registrar of Companies.
6.Advising on debt collecting and assisting in recovering old outstanding debts.
7.Advising on all insurance matters.
Other work, such as HMRC investigations, will be charged separately.
We aim to notify most clients of our fee in advance, but where we cannot predict the work involved we ask for payment when the accounts are completed.
Our normal terms are net 7 days. Delays in paying us waste valuable time and incur unnecessary costs.
Skype: willconsult69 (Derek Williamson)