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Q and A

Q Are you so busy fighting your way through paperwork that there just aren’t enough hours in the day?

A:

At Modena accountants we understand we each have different skills and strengths. Being a business owner and good at what you do it doesn’t mean you’re also good at bookkeeping, VAT, PAYE and cutting through red tape!
Often, keeping the books up to date and accurate is an extra burden that distracts you from what you want to be getting on with, and one you could just do without.

We can relieve you of all this.  Give yourself more time to expand your business and to become more profitable and more efficient by letting us take over this important task.

Q Do you work all week and then find you spend your evenings and weekends catching up on paperwork?

A:

Modena can offer you affordable solutions.  By passing the burden of bookkeeping over to us you regain your personal time to spend with your family and friends, doing the things that make all your hard work worthwhile.  As professionals, we’ll also be able to complete the work quickly and efficiently, cutting down on the actual time it takes to complete the work, making it more affordable for you.

Q  Just started your own business and think accountants are too expensive?

A:

This is quite normal for new businesses. As accountants we understand how tough it can be starting out in the business world, and that’s all the more reason to discuss how we can help right from the outset.

By making sure you manage your bookkeeping and accounts properly from the early days of the business, you are less likely to get into trouble with your cash flow and not making the correct returns to the tax man and  Companies House which can land you with expensive fines.  So while there is a cost involved, it can more than pay for itself in terms of the saving in your time and avoiding problems.

Add to this that we’re a small, local company without the usual big office overheads that larger accountants firms often carry, and there really is no reason to find out just what we can do for you. 

Q  What services can an accountant offer to smaller companies and sole traders?

A: 

We can either take on all the accounting and bookkeeping tasks, or we can provide the tools and support for people to administer their own businesses and get them going in the right direction.  We have helped many start-up businesses in this way.  We have a fantastic easy-to-use bookkeeping spreadsheet that we can tailor for your individual business requirements which will reduce the stress of bookkeeping, as it is clear and simple to use. It will also save you money when it comes to preparing your-end-of-year accounts as your bookkeeping will all be in order.

This service is available for a one-off payment which includes support from Modena for six months.

Q  Do I have to use an accountant for my business?

A:

Not at all.  As a sole trader or small business you can keep your own books, do your own payroll and prepare and submit your own accounts.  The problem is there are strict rules on how to carry out each of these tasks, particularly if you’re a limited company or limited partnership, and fines and penalties if you get it wrong.  The rules also keep changing, making it even more difficult to know you’re doing the right thing.

An accountant is a there to make sure everything is done properly and on time.  You can do much of the basic work yourself, such as bookkeeping, but it really pays to take advice from a professional.  It will save you a lot of time and stress, and will probably save you money in the long run 

Q  Does my company need to submit audited accounts?

A:

Your company can qualify for an audit exemption if your business/company meets at least 2 of the following conditions:

  • It has an annual turnover of less than £6.5 million.
  • It has assets worth less than £3.26 million.
  • It has 50 or fewer employees on average.

(These figures are correct as of July 2013)

Q  When should I register for VAT?

A:

There are two answers to this question.

First, you have to register for VAT once your turnover reaches a certain level.  At the moment (July 2013) that figure is £79,000 per year.

Second, you can actually register for VAT at any time you like, and there are times when this is a distinct advantage.  Once you are registered, as well as having to charge your customers VAT and passing that money on to HMRC you can also claim back the VAT on the items you buy for your own business, and this could save you quite a lot of money.

There is more accounting  to do to make sure your VAT return is completed properly every three months, but the money you can save can makes it a very worthwhile exercise.

The exception to this is if all the items you sell are VAT exempt (such as medical products or certain foods).  In this case the tax man will not allow you to claim back VAT when you’re not collecting any in.

Q  What is CIS?

A:

CIS stands for Construction Industry Scheme and it is a set of regulations and procedures for paying sub-contractors in the construction industry. 

The regulations will also apply to businesses that, while they may not be directly involved in the construction industry, spend a lot of their money on construction projects. 

The regulations can be quite complex, so this is definitely one to seek advice about.  If you are in the construction business, or spend an average of a million a year on construction projects, then check with your accountants to make sure you are following the procedures correctly.

Q  What is Capital Gains Tax?

A:

If you make a profit from selling assets, such as shares or property, then you are said to have made a “capital gain”, and the tax man will want his share of that profit.  There are allowances and reliefs that can used to reduce the amount of tax that has to be paid so, once again, discuss this with your accountant to make sure you only pay as much you have to.

Q  What is Advantage of setting up a Limited Company?

A:

The term “Limited” means limited liability, and it protects a business owner from being personally liable for the debts of a business. 

Setting up a limited company makes the business a legal entity, in effect a person in its own right, and all liability rests with the company.  The limit of the liability is the assets of the company, including any money invested by the owners and directors.

The advantages of trading as a Limited Company, as well as protecting yourself personally, include:

  • The credibility of a formed company make it easier to raise funds and investments.
  • It is possible to offer shares in the business.
  • The tax paid on your profits is reduced, often significantly.

The main disadvantages are the formal accounts you have to prepare each year, which incurs extra work and expense, and the fact those accounts are available to the public means a loss of financial privacy.

“You do what you’re good at and let us take care of the rest” Tony Bourne Modena Accountancy Services

getting the right answers

 

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