Bookkeeping Tips for Small Businesses

Businessperson Calculating Tax

If you own your own business or are considering such a move, keeping accurate records not only benefits you for tax compliance, but it could also benefit your business.

Keeping accurate records may:

  • Reduce your accountancy fees
  • make filling in your tax return more straightforward
  • help you with budgeting and cashflow
  • help your business grow with the help of a business loan
  • help ensure you receive the correct Tax Credits

What you need to record:
Records should show all the money coming in and going out of your business, whether it’s cash, cheque or credit card transactions. It’s important to keep your business records entirely separate from your personal records, so it’s recommended that you set up a separate business bank account.

For money coming in, the records you should keep include:

  • payslips
  • invoices
  • till rolls
  • bank statements

For money going out, keep a record of all:

  • receipts
  • purchase invoices
  • cheque stubs
  • motoring expenses
  • credit card statements

Cash books:
All small businesses rely on cash books to help keep track of their business income and outgoings. Cash books can either be paper-based or take the form of computer software such as Excel, Sage, Xero etc. Your accountant will be able to advise you on the most appropriate type of cash book for your specific business.

If you decide to keep your records on the computer, you’ll need to keep a copy of all relevant documents and be able to provide these to HMRC if necessary, especially P45’s, P60’s and any paperwork showing tax has been deducted.

  • Use a ‘petty cash book’ to record all minor business-related cash transactions, and write a short description of each one.
  • Use a ‘cash book’ to record transactions made through your bank account as well as any cash transactions. A cash book will have columns for income and expenses and a separate column for miscellaneous. You may find it helpful to use the same expenses headings as those used on HMRC’s tax return form. You should also include a “drawings” column for any money taken out of the business for personal use.

VAT:
If your turnover of VAT taxable goods or services exceeds the VAT threshold (currently £83,000) you must register for VAT and keep the following records:

  • VAT account: This is a record of VAT charged on sales and VAT paid on purchases, noted under the headings VAT payable and VAT deductible. The VAT account aligns your business records with your VAT return.
  • VAT invoices: These show the VAT you’ve charged and the VAT that has been charged to you.

If you feel like this is too much, or your time would be more valuable spent elsewhere, your accountant may offer a bookkeeping service that deals with this for you. Here at Green & Co our staff are trained on a number of different bookkeeping packages including Sage and Xero. If you would like to speak to one of team regarding this service, please contact us on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Cwmbran tax specialist recognised in national competition

Leanne Flanagan with David Gauke MP

This weeks edition of the South Wales Argus features an article on Leanne Flanagan, our Tax Senior who has been recognised in a national competition.

A Tax Senior at a Cwmbran-based accountancy firm has been commended by the industry’s governing body for an essay submitted as part of a competition.

Leanne Flanagan, Tax Senior at Green & Co Accountants and Tax Advisors, submitted an essay to The Institute of Chartered Accountants in England & Wales (ICAEW) entitled: Can personal tax compliance be achieved through an app on your smartphone?

The article was commended in the national competition, beating off stiff competition from the industry’s top performers in England and Wales.

The essay argued that smartphone technology could help regulate tax compliance, while reducing non-compliance from those individuals and organisations who fall foul of regulations.

The essay argues that whilst an app, and wider technology, is not a simple fix and easy-to-access solution, it would help bodies such as HMRC communicate with those who currently fail to comply.

Ms Flanagan said: “I am thrilled that the essay has been commended by the ICAEW. It’s incredibly satisfying knowing that my work has been highlighted and so well received. The essay was centered around how we can be realistic about reaching wider masses and improving compliance, with apps and technology a key tool that we can use in order to achieve this.”

Ms Flanagan attended an award ceremony in London recently to collect her cash prize, along with a set of Tolley Yellow and Orange Handbooks.

Director at Green & Co Accountants and Tax Advisors Ed Gooderham said: “We’re incredibly proud of Leanne and her achievement. This is another example of how a Green & Co staff member has gone above and beyond what is expected of them.”

Green & Co Accountants and Tax Advisors specialise in business growth and tax minimisation for businesses across Wales and the South West of England.

For proactive advice, contact Green & Co Accountants and Tax Advisors on 01633 871 122, follow @Green_and_Co on Twitter or email ed@greenandco.com.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Protecting Your Business Data

Cyber security concept on virtual screen,  consultant presentation

A recent survey of financial and IT auditors conducted by CareersinAudit.com, has revealed that they believe many small businesses are unaware of the importance of protecting their IT systems from loss of data and cyber-attacks.

The survey, carried out in the Spring of 2016, revealed that many small business owners do not feel the cost of IT protection worth the investment, considering their limited resources would be better spent elsewhere. As a result, it is estimated around half of businesses utilising IT systems have no back up or rescue plan in place should their data be lost or corrupted. Of those who do put a safeguard in place, it is often only done once without reviewing or updating in line with their business growth or increased risk.

The danger is that business owners do not fully comprehend how vulnerable they can be with no protection in place. The loss of data can affect not only the business’s ability to operate, but also raise issues of trust by customers, particularly where confidential data has been compromised or leaked.

Much of the blame is put down to a lack of guidance from industry regulatory bodies, as well as a lack of support for start-ups from the Government. The survey director has called for business owners to take a greater responsibility for their data protection policies and well as suggesting financial assistance be provided for related training and risk awareness for small enterprises.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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What is a Registered Office?

What is a Registered Office

A registered office address is the official address of a limited company or LLP that is listed at Companies House.

Companies House, H M Revenue and Customs and other relevant government bodies use this address to send company notices, letters and reminders, etc. However, it does not need to be the main place of business.

It is important that you keep your registered office address up to date and that arrangements are made to have mail forwarded to someone who is dealing with the administrative duties of the company.

What address can I use?
The registered office address doesn’t have to be where your company conducts its actual business or trade. You can use any address as long as it is a physical address and in the same country where your company is registered, for example, a company registered in England and Wales must have a registered address in England or Wales.

You can use a PO Box but you must include a physical address and postcode after the PO Box number.

Can I avoid using my home/business address?
If you do not want to use your home/business address as your registered office, you can either approach your accountant who may offer the use of their address as part of their service, or you can use a registered office service, also known as a Virtual Office/Virtual Address.

If you or someone you live with are at risk of violence or intimidation because of your company’s work, you can ask Companies House to keep your registered address private.

Green & Co offer a Virtual Office service that allows other businesses to use their Pembroke House business centre as a registered office. In addition to this, they have meeting rooms available for hire, making it possible to hold meetings at your registered office.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Forum focuses on legal requirements for landlords

Gwent Landlord Forum

This weeks edition of the South Wales Argus features an article on our Gwent Landlord Forum.

Four guest speakers talking about a range of issues affecting landlords were at the Parkway Hotel and Spa, Cwmbran, for the recent meeting of the Cwmbran Landlord Forum.

The forum is organised by Cwmbran-based Quality Solicitors Rubin Lewis O’Brien, accountancy firm Green & Co, and lettings agency SerenLiving and is held bi-monthly.

Paul Fosh, of Newport-based Paul Fosh Auctions, gave an informative presentation on buying and selling at auction.

He was followed by Ian Bakewell, from Monmouthshire County Council’s private sector housing team.

He explained the services on offer to local landlords, ranging from health and safety requirements to advice on how to make private sector lettings a more desirable and affordable option.

Jason Critchley, of Direct Collection Bailiffs and Channel 5’s Can’t pay we take it away, discussed the High Court Possession service and the planned changes to rent arrears, highlighting the effect this may have on private landlords.

Expert Japanese Knotweed killer Michael Weihahn, of Invasive Vegetation Management and Treatment, was the finally speaker at the event.

He informed the landlords that the service was now a legal requirement when dealing with Japanese Knotweed, as left untreated, it can spread quickly and devalues land.

Penny Jarman, of Quality Solicitors Rubin Lewis O’Brien, said: “The event was another great success with all the landlords thoroughly briefed on some important topics. The forums are a great way to get vital information out to stakeholders.

“We hope to have helped demonstrate that support and advice is always available within the private lettings community”.

Green & Co Accountants and Tax Advisors specialise in business growth and tax minimisation for businesses across Wales and the South West of England.

For proactive advice, contact Green & Co Accountants and Tax Advisors on 01633 871 122, follow @Green_and_Co on Twitter or email ed@greenandco.com.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Sponsor The Winning Team

Sponsor The Winning Team.jpg

Following on from this summer’s Euro 2016 football tournament, and with the Rio Olympics just around the corner, could your business benefit from sports sponsorship?

Sponsorship is a mutually beneficial relationship between a rights owner, such as a sports club, and a fund provider – a business. To many it may seem to be the hunting ground of large multinational corporations, but small businesses may also be able to benefit, and generate publicity for their business.

It can also be a way to generate trust and goodwill in the local community. Your sponsorship may be enough to buy kits and sports equipment for a local children’s football club, or maybe fund a coaching program at a junior athletics club. For smaller businesses, sponsorship is a good way to be seen giving back, by supporting sport at the grass roots level.

But before entering into a deal, remember that it is more than just a corporate exercise. You may well imagine your company logo appearing all over an event, but instead you can view it as an opportunity to engage with your target audience, use it to tell your story, encourage customer relationships and build your brand.

There are many things which need consideration before entering such agreements if tax relief is to be allowable e.g. company logo, advertisements etc. care needs to be taken.

For more information contact our Tax Department on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Crackdown on Illegal Workers

British and European Relations Concept Image

This week marked the beginning of a crackdown on the hiring of illegal workers. From Tuesday 12th July, employers convicted of an offence could face unlimited fines and being jailed for up to five years.

Employers can be found guilty of an offence if they employ an individual while having ‘reasonable cause’ to believe their immigration status would disqualify them from working.

Until the new ruling, employers could only be prosecuted for knowingly employing people who were not legally entitled to work in the country.

Immigration minister James Brokenshire said that illegal workers denied jobs to UK citizens and legal migrants, and highlighted the severity of the actions that can be taken against employers: ‘Rogue employers could have their businesses closed, their licences removed, or face prosecution if they continue to flout the law’.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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