You may also find our article on DIY Accounting helpful.
Well, of course, you can! If you’re an accountant yourself, or if you’re some kind of maths whizz that also happens to understand the intricacies of HMRC and its multitude of forms . . .
Seriously though, yes, it is possible to do your accounts yourself and to complete all of the necessary tax return forms. Having said that, not only will it take up many hours of your valuable time – which could be used for chargeable work, or for spending quality time with family and friends – you also stand an above average chance of getting it wrong. Which could lead to any number of worrying situations, such as where you’ve not put enough aside to cover your tax bill, or you get fined for the unpaid tax because you missed a vital date.
Granted, you could argue that we are scaremongering here but look at it another way. You COULD build your own house, but why would you when it’s much better to pay a builder and then to concentrate on doing what you do best, to earn the money to pay for it? And your accounts are no different.
What would an accountant actually do for me?
Providing an accountancy service involves far more than simply checking invoices and receipts, and then filling in a tax return form once a year. A good accountant will provide ongoing, proactive advice throughout the year and not just at the end when it will probably be too late to save you from an excessive tax bill. And in order to do this, they have to keep abreast of the UK tax system and all of its regulations and legislative changes.
In plain English, an accountant should:
- Help you to structure your company in the most tax efficient way possible
- Help you to understand the best way to take money out of your company
- Understand what you can claim by way of expenses and the impact on your income and taxes
- Help you to understand all of your tax liabilities both personal and corporate. These include:
- Employers National Insurance contributions
- Employees National Insurance contributions
- Personal income tax
- VAT (Flat Rate Scheme or standard VAT)
- Corporation tax
- Prepare and complete your personal self-assessment tax return each year
- Understand when, how much and where to send payment for all taxes that are due
- Explain the benefits of not taking every penny out of your company along with other tax planning opportunities
All of which you would struggle to do for yourself, whilst also running your business!
Poor tax planning, or even worse no tax planning, can lead to any number of financial difficulties – such as an overdrawn directors loan account, financial penalties due to late or incorrectly submitted tax submissions, incurring additional tax for things that are classed as ‘benefits in kind’ and so on. The list is endless.
What services does SJD Accountancy provide?
Our all-inclusive fixed fee service starts from £120 plus VAT per month which covers:
- Year-end accounts*
- Corporation tax
- Payroll Bureau
- Dividend administration
- Dealing with HM Revenue and Customs and Companies House
- Quarterly VAT Calculations
- Support with Annual Returns
- Personal Taxation
- Access to your own dedicated accountant* for all help and advice
- Free bookkeeping software
i.e. everything that you’ll need for both your limited company and your personal tax affairs.
Check our packages for more detail.
The SJD Service
You will have access to your own personal and dedicated accountant* via telephone, email and face to face meetings where necessary, to give you all of the help and advice that you need – unlike some companies that require you to work through a call centre and only have access to your accountant at year end. We’ll also send you email alerts so you never miss a deadline. We understand that you are busy and may miss one notification, which is why we produce several!
We will support you fully, act as an intermediary between you and all HMRC correspondence and contact with regards to VAT, PAYE and other tax-related issues. We will also keep you fully updated with regards to changes in tax law and the UK tax system that may affect you.
If you would like more detail, here is an even more comprehensive list of what your SJD accountant will do for you:
- Fully reconcile your bank accounts.
- Analyse other income and sundries.
- Check allowed and disallowed expenses, and provide suggestions for items that are not being claimed.
- Prepare your Company Year-End Accounts* within 28 days of us receiving all the relevant information from you.
- Calculate your Corporation Tax payable and advise you of the amount and date for payment.
- Prepare your Final Accounts, CT600 for HM Revenue and Customs and Abbreviated Accounts for Companies House where necessary.
- Send final paperwork to you for signature and return, reminding you and ‘chasing’ you where necessary, as we understand you may have missed our initial letters, emails or telephone calls.
- Submit Accounts and CT600 to HMRC and Abbreviated Account to Companies House on your behalf.
- If you send cheque’s to us, we will make sure they reach HMRC with the correct filing information – e.g. corporation tax reference, company incorporation number, company name, accounting period details and so on.
- Record P45 details, prepare and submit P46 if necessary.
- Calculation of gross salary, tax and NI amounts due to HMRC.
- Manage your payroll to include: detailed summary with the advice of payment to make to HMRC and detailed wages book to show net pay for employees (although you are the director of your own company you are also an employee).
- Real-Time Submission filings with HMRC.
- If relevant, we will produce end of year IR35 calculations and advice for payment.
- Salary information provided for the Director i.e. you and one other employee, usually Company Secretary. Although, if you are a new company you probably won’t have a Company Secretary as regulations changed early this year (2008) removing the need to have a Secretary.
- Prepare and submit end of year P35’s and P14’s to HMRC.
- Prepare end of year P60 and send to you for your records.
- Set up new employees/remove employees on your payroll.
- Organise and manage overpayment and underpayment notices throughout the year.
- Change of Revenue Office details.
- Organise HMRC payslip booklets and provide support and advice on their completion.
- Manage any change in tax codes.
- Prepare P11D once you have completed your annual (online) questionnaire and submit to HMRC. If you have benefits in kind we will calculate the tax due and advise you of any payment HMRC will be looking for.
- To help us complete the above we will ask you for your P45 and confirm your IR35 status (we are happy to review any IR35 contract however this is outside the scope of normal work and as such we charge a small amount which is of course fully tax deductible).
- To help us complete the above, we will ask you for your P45 and confirm your IR35 status. We are also happy to review any IR35 contract, however, this is outside the scope of normal work and as such we charge a small amount, which is of course fully tax deductible.
- Help you to understand the level of corporation tax due following dividends are taken from your company
Dealing with HMRC and Companies House
- We will handle all incoming HMRC and Companies House enquiries on your behalf
- Quarterly VAT Calculations
- Send email and mobile text reminders at the end of each VAT quarter
- VAT registration advice, including whether you would benefit from the Flat Rate Scheme
- Completion of quarterly VAT returns
- Review of the spreadsheet for accuracy
- Flat Rate VAT Scheme application if necessary
- Ongoing VAT advice
- Help with any under or overpayment
Completion of Annual Return
- Prepare all Annual Returns
- Send email and mobile text reminders throughout the year to remind you to complete your online questionnaire.
- Prepare and submit your personal tax returns.
- Calculate any tax due, together with payments on account.
- Review and, if possible, reduce the payments on account for the following year.
Finally, what is iXBRL?
Well, it stands for extensible business reporting language and is a language for describing financial statements. ‘So what?!’ I hear you say. Well, if your year end is after 31st March 2011, your accounts and corporation tax return will have to be submitted to HMRC in the format of iXBRL. No choice – they have to be in iXRBL format.
If you use high powered software programs like Sage or IRIS, which most accountants use, you won’t have any worries. However, if your uncle or best mate submit your returns for you, they are going to need to learn something new.
What if you don’t use Sage or IRIS? If you or your uncle/best friend have decided not to invest in one of these sophisticated packages, the HMRC site does allow you to build and submit an iXBRL formatted file, but it’s likely to require more time to get used to it and we doubt it will be all that simple. Of course, you could just let your accountant do it instead.
If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: firstname.lastname@example.org.