Are you the owner of a growing business that’s looking to comply with all its essential accounting and administrative obligations in 2019? Here are five burning questions you should ask of your accountant to ensure your small firm is ahead of the game:
Question 1 - What is Making Tax Digital and is my business ready for it?
Making Tax Digital (MTD) is the name of the Government’s plans to bring the UK’s tax system into the 21st century.
VAT-registered businesses with a turnover above the £85,000 per annum VAT threshold are required to file their next quarterly VAT return using MTD-compatible digital software.
Your accountant should be able to inform you whether your business is obliged to comply with MTD for VAT or if you are eligible to wait for the next phase of the MTD roll-out.
Question 2 - Is it possible to become paperless within my business?
You might be wondering why we’ve suggested your accountant as a first port of call – but stay with us. Modern accountancy practices are able to provide expense recording tools and invoice raising software which operates in the cloud. This enables small businesses to scan, store and sort such records very easily, without the need to print out each of these items.
TaxAssist’s nationwide network of accountants is helping small businesses to go paperless by offering them access to software called Receipt Bank, which allows them to send expense paperwork instantly to their TaxAssist Accountant, ensuring they never lose another expense receipt again. And that’s just the start, we can pull in your bank statement feeds and fetch regular invoices online to save you time and bring your financial information quickly up to date.
Question 3 - Could I be claiming Research & Development Tax Credits?
Firstly, are you trading as a company. If yes, your accountant should know the parameters for SMEs that allow your business to claim R&D tax credits. The fundamental requirement is that your company must have been engaged in a project that seeks to achieve an advance in science or technology. R&D tax relief isn’t solely available for successful projects either. These advances may be an improvement to an existing product or even an everyday process within your business that can improve your bottom line.
The tax relief offered to SMEs with qualifying R&D projects is 230% - for every £1 of qualifying expenditure, you’ll gain an additional £1.30 of tax relief.
Or to spin it a different way – every £1 you spend secures a deduction of £2.30 against taxable profits. Even loss-making firms can claim repayable tax credits worth 14.5%.
Question 4 - How much money do my customers owe me?
Your accountant can supply you with a list of clients or customers who owe you money that might have been overlooked in recent months. Assuming the bookkeeping is all up to date, your accountant can identify income that’s due to you but has not been received to the business.
A half-hour review with your accountant could result in action taken that leads to thousands of pounds of income that would have otherwise been forgotten or written-off.
Question 5 - How can you help me manage my cashflow?
Properly projecting your business’s cashflow is as essential as winning new customers. Tedious, detailed cashflow projections aren’t easy to master, but that’s what you have an accountant for.
Your accountant can help you develop an organised, effective cashflow model that allows you to adjust your operations in ways that help you survive shortfalls, as well as improving your cash in and managing your outgoings.
If you aren’t able to have these kinds of discussions with your accountant or they don’t have the answers you want to hear, contact us to make a free initial consultation on 01284 771899 or use our online contact form to find out more about our services and how they can benefit your business.
By Samantha Skyring FCCA
Last updated August 2019
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.