Helping keep your figures in shape
WHAT ARE THE DIFFERENCES BETWEEN AN ACCOUNTANT AND A BOOKKEEPER?
Accountants and bookkeepers can do the same work. A bookkeeper is there to keep your business records in order and make sure things are processed.
An accountant can also do this, here at SBA we make use of Xero, FreeAgent and HubDoc to automate as much of this process as we can. A streamlined process with your bookkeeping can help save you time and money.
An accountant is also qualified to provide you with tax advice as well as provide consultation and analysis to assist your business.
HOW LONG SHOULD I KEEP MY TAX RECORDS?
If you are self-employed you should keep your tax records for 5 years after the 31 January filing deadline.
If you are a limited company you need to keep the records for 6 years from your financial year end.
HOW MUCH DO I NEED TO EARN BEFORE I HAVE TO COMPLETE A TAX RETURN?
This is a question I often see asked on Facebook. The answer I often see is once your profit is over the tax free amount.
Unfortunately this isn't right. You need to tell HMRC and start completing a self-assessment when your sales are over £1,000.
Why £1,000? Self-employed businesses are allowed to claim either their actual business expenses or a trading income allowance of £1,000. It is assumed by HRMC that if your sales are £1,000 is less you will claim this allowance.
The reason why people say if you are under the tax free amount you don't need to complete a return is because, unless you have income elsewhere, you probably won't have any income tax to pay. Unfortunately it isn't only your income tax that is calcuated as part of the self-assessment, it is also your national insurance contributions.
HMRC use the profits you have made to keep your national insurance records up to date and this inturn impacts your state pension. National insurance contributions are also payable at a lower profit then income tax.