Mr David Cameron said that small business were ‘the lifeblood’ of the UK economy, and that was very much a statement based in fact.
Small and medium sized businesses make up 99.9% of all UK businesses and are essential to the success of the economy across all sectors, providing over one third of all jobs and a fifth of total turnover.
What makes a good small business accountant?
If you own or are involved the operation of a small business, you will soon discover how essential it is to have a good accountant.
Its an unfortunate fact that we often see small business clients coming to us with tax delinquency issues or who have missed tax mitigation opportunities simply because they did not instruct the right accountant, at the right time.
In the initial period of trading many small businesses make the mistake of choosing an accountant based on fee alone, with a mantra of ‘the cheaper the better’ they embark on a sporadic google hunt.
Most, if not all directors realise this is a mistake, this realisation usually occurs when they are presented with the first year’s accounts and corporation tax liability.
An small business accountant is not an homogenous product and choosing one based on fee alone is akin to choosing your ‘other half’ by candlelight!
We know small business, we’re one ourselves! We work closely with our small business clients to ensure they have the correct corporate structure, support and advice to not just survive, but to grow and prosper.
When operating a small business you need actuate and timely management information, if you are trading above the VAT threshold you also have a legal requirement to maintain digital books and records.
We believe having access to and reviewing financial information on your businesses regularly gives clarity around the performance which sometimes you fail to see when involved in the day to day operations.
We are registered, qualified partners with all the major software houses including SAGE, XERO, Kashflow and are one of the UK’s few Platinum Partners of Intuits world leading software Quickbooks, providing our small business clients access to the platinum customer support lines and resources, essential for E commerce and retail EPOS integrated clients.
When was the last time you walked through your Management Information with your accountant?
Many small businesses continue to outsource their statutory reporting obligations even when they have a full in-house finance team. The reason for this is in no small part due to the complex and disparate laws, standards and regulations surrounding financial reporting in the UK, many Directors find they lack the in house skills, technical knowledge and tools to make the necessary filings to Companies house and to HMRC, as such taking these responsibilities in house is simply not attractive or cost effective.
Once engaged we can cover all statutory reporting from accounts productions through to VAT, payroll, pension, CIS and intermediary reporting.
We are licenced and regulated Chartered Accountants and registered HMRC agents, we can operate as the companies registered office and will manage all of the statutory reporting requirements as instructed.
Many of the required filings for a limited company carry fines for non-compliance, and some criminal prosecution, it is essential you understand what filings you need to make when you are operating a limited company. The laws are changing all the time and it may be that you are not aware of a requirement for your given industry or trade.
An example of HMRC introducing new reporting requirements would be best demonstrated by the recent introduction of new intermediary reporting requirements in the recruitment industry.
The introduction of these rules were not widely publicised and many recruiters were simply unaware they had a new quarterly reporting requirement.
HMRC levied fines of up to £650 per day for non-compliance which created serious liquidity problems for many small businesses in the industry.
As you can see, ensuring you are up to date with all statutory reporting is essential.
Our small business accountants can assist on all aspects of statutory reporting, including the provision of legal advice, the services we cover include but are not limited to:
Reporting to the Pension Regulator – workplace pensions
Tax Planning and Mitigation
Paying the correct amount of tax is not as simple as it may sound. Each business is different so ensuring you have the correct advice and implementation of planning strategies is essential.
From understand what costs your business incurs, and which of these will be an allowable tax deduction may help align your expenditure to reduce your tax liabilities.
A well-timed asset purchase or contribution to a qualifying pension plan can have a dramatic effect on corporation tax.
With changes in the benefit in kind rules, it may be possible to purchase a car in your company and pay no personal BIK tax whilst also receiving a cheque from HMRC for 19% of the cars total value!
Trivial benefits, use of home as office, business telephones, these are but a few of the many small exemptions and allowances that exist and that we advise and implement into a planning strategy to ensure you only pay the tax that is due and not a penny more.
We work with our innovative clients managing claims under the governments research and development [R&D] tax credit scheme, returning 33p for every £1 spent on R&D qualifying activity.
Further mitigation of corporation taxes can be achieved by Intelligent application of the annual investment allowance and first year allowances.
Low tax liabilities do not happen by mistake, they happen by design, requiring detailed analysis of your business and expert implementation.
We provide filing and advisory services acorss indirect and withholding taxes such as VAT and CIS [Construction Industry Scheme]. Our small business accountants work with clients to ensure correct application and operation of each tax, with HMRC soon to hold preferential status in the event of insolvency for both these taxes, it is essential Directors understand the implications of errors and non-compliance.
Profit extraction is a huge part of our tax planning advisory service which we provide to all of our small business clients. We work with directors and shareholders to advise a structure and profit extraction model that will work for them.
Shareholders are often surprised when we discuss exit strategies at the nascent stages of a company, however it is essential those invested understand, at the very least from a tax perspective, the current position and options available to them.
As a company progresses through its life cycle we are able to advise and support small businesses with all end of life services including: