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The services of an external accountant are a lifeline for around 91% of small businesses in the UK (source ICAEW), but does your limited company need to have one? There is no legal requirement for Accountant limited Company, but it is very beneficial. They can perform valuable services like filing annual accounts and corporation tax returns. They can also offer business advice and devise efficient strategies to save your company money. If you are not sure you need an accountant for your small business, please read on to find out how Account Ease can take hours of number crunching, form filling and box ticking off of your hands, and let you get back to running the business you love. What services can an accountant provide for my limited company? If you’ve ever wanted more time during the day, enlisting an competent accountant to handle your financial affairs is like taking the genie come out of bottles. In addition, there’s the potential for more than three wishes. Here’s a sample of a handful of the great services that accountants can provide the limited company. The process of setting up a new business Your accountant can benefit you register your company at Companies House if you wish to avoid hassle and time during the crucial formal days. They’ll also provide you with the facts about your new tax obligation and coordinate with the good folks at HMRC in relation to tax registration. Payroll For large corporations the payroll is usually run in-house. For smaller enterprises, it’s recommended to get this task for an accountant. You could also say goodbye to the hours of your day that are spent slogging through income taxes as well as HMRC paperwork. Luckily, accountants who are good can also be payroll experts who are awed by this sort of work (each for their personal reasons) VAT VAT – If these three letters make you feel with fear, you’re not alone. This can be a bit confusing and the rules are constantly changing. A professional accountant can benefit to navigate your business’s VAT obligations and select the most appropriate payment method to assure you don’t end up paying more than you should. They can also make easy tasks of annual VAT return in order to assure the company does not face sudden fees. Bookkeeping Bookkeeping for day-to-day activities is a cornerstone of effective managing finances. As it it can be tedious, time-consuming and boring It’s true. Invoicing every receipt could be a tedious task at the end of the year (or when HMRC is knocking) it is not a good idea to search to find missing receipts or transactions. We accountants are meticulous, and can manage your bookkeeping with utmost effectiveness, allowing you to free your time and energy. Cloud Accounting Software Day-to-day bookkeeping is the cornerstone of good financial management… and is time-consuming, dull and repetitive, let’s face it. . We frequently rant on about the advantages of software such as Xero however, with the right reasons. It will change the method of managing your accounts by speeding up the process and removing errors. Because everything is through the cloud you’ll always ensure that you’re viewing the most up-to-date data that can benefit in cash flow. Also, it makes year-end tax accounting easy and may eventually be mandatory to submit tax returns for corporations. If you’re still not in the game the software, your accountant will walk about the advantages and benefit you to get the excellent from the software that meets the requirements of your business. Pros of hiring an accountant If you are still weighing up the pros and cons of hiring an accountant for your limited company. It is worth calculating the hours you will save to work on your business rather than spreadsheet surfing and fiddling around with paperwork. Also, factor in the peace of mind you will gain. The comfort of avoiding tax investigations and penalties is enough to help any company director get a better night’s sleep! Finally, offset the reduced costs in potential tax savings and efficient cash flow forecasting. Consider the cost of hiring a skilled accountant in-house, and that’s another cost to cross off the list. That genie really doesn’t have anything on a reliable accountant (except perhaps for the outfit). When is the best time to get a limited company accountant? According to the old saying (almost) suggests it, the desirable moment to hire an accountant is right now and the accurate time to hire one is right today. A good accountant will provide value right from the start. Giving skillful guidance to help start your business off on the starting point. A lot of business owners seek out with a skillful as the year’s end rolls around. But it’s generally advisable to engage an accountant earlier. This way, your financials are in order and you’ll be aware of your tax obligations so that you don’t get unexpected expenses. Why choose Account Ease as my limited company accountant? You and your business deserve every chance to succeed, and the right accountant can give you the financial confidence you need to go forth and prosper. Account Ease has vast experience in accounting for small businesses. Our team are an approachable, friendly and professional bunch, so you can expect great customer service. We understand that not everyone is as excited about accounting as we are. So we cut through the jargon and aim to relieve the headache of fulfilling your financial responsibilities. Not only will we look after your limited company accounts like they were our own. But we will also be proactive in finding efficiencies to save you money.

It can be daunting having to file a First self assessment tax return for the first time. Read our guide to when you need to do it, the advantages of using an accountant and why submitting your tax return early is beneficial. You must submit a self-assessment tax return if you are self-employed as a sole trader and earned more than £1,000 in the relevant tax year before deducting any tax reliefs. There are other reasons why you might need to file a tax return which are outlined here. If you are required to register for self-assessment with HM Revenue & Customs (HMRC). You must do so before 5th October after the end of the relevant tax year in which you became liable. For example, the deadline for the 2023/24 tax year is 5th October 2024. Your self-assessment tax return must be filed by 31st January in the following year. This is also the deadline for when you need to pay the tax you owe. For example, the deadline for the 2023/24 tax year is 31st January 2025. Is Hiring an Accountant Necessary for Filing Your Tax Return? There’s no legal requirement to hire an accountant to prepare your self-assessment tax return, and it’s entirely possible to do it yourself. However this DIY method can be a bit difficult, especially for those who are doing this for the very first time. It is also possible to be fined when you do it wrong or fail to meet the deadline. By hiring an accountant, you’ll feel confident that everything is being done in a timely manner and that all the required information from the HMRC is provided. The accountant can help you claim all expenses you are entitled to and help you maximise the tax savings you can get. The documents your accountant needs to see Your accountant will require various details to prepare your tax return. Income from self-employment: In the event that you earn kind of trading income you must deliver specifics and receipts of all earnings received and expenses paid. You should also supply copies of bank and credit card statements, including those for the month after the year end in case some payments cleared during the current year. Make sure you keep details of any business miles travelled as an element of motor expenses may be Income from employment: You will need to favor your P60 if you earn income from work. If your employment ended at the end of the year, then you must serve the P45 instead. If you have received any benefits in the form of cash, your accountant will require the P11D. The dividend income: The company must serve the details of any dividends that you have received throughout the during the year. They are typically provided by the business by way of a transfer guidance. Income from rental: As a tenant, you must to help in providing specifics of the rental revenue. Management costs as well as mortgage-related interest. Tax relief is offered on certain costs, including the mortgage’s interest payment. Pension contributions from private sources: Tax relief is accessible for private pension contributions. So it is important to add the details of every pension payouts made throughout the course of the year. Interest from banks: Your tax return must contain details of any interest that you have earned on building society and bank accounts. There is no requirement to declare tax-free items like ISAs. Other earnings or income: This could be from a pension company as well as a different self-employed position or even from the sale of shares, a rental home and so on. Why you should file your tax return early As a business owner you’re faced with enough work to complete and it’s common to delay the tax return filing until the very last minute. There are a lot of advantages to starting it early. Avoid errors The rush to complete your tax return in order in to meet the 31st of January deadline could result in mistakes. Taxes are complicated and you must ensure that you can give suitable time to provide to your tax accountant the complete data they require. Making your tax return late in the last minute may cause you to miss chances to cut down on your tax bill because you are not taking advantage of all tax reliefs. Accountants deal with a third of tax returns for their clients in January. So contacting yours early will make them very happy! Beware of any penalities Every penny counts so don’t leave it so late that you miss the filing deadline. You’ll be hit by an automatic PS100 filing penalty and if your tax return becomes more than three months late. It’s PS10 daily penalties up to a maximum of PS900. A penalty of the higher of PS300 or 5% of your tax due is then charged if your return is six months late and again if it’s over 12 months late. Improve cash flow plan In these economic turmoil, filing your taxes early is extremely beneficial to you control of your cashflow. Knowing precisely how much tax you have to pay in the months of January and June. If you’re paying payment on a credit card this means you are able to determine how you’ll pay the tax. First-time tax return filers may be awed by the requirement to make payments through a bank accounts. By filing early, you’ll ensure you’re able pay the bill or have the time to establish payments with HMRC should you be unable to settle the amount in the full amount. Get tax refunds before the deadline You may be due a tax refund and the sooner you file a tax return, the sooner you’ll receive it. Reasons for tax refunds include excessive payments on account based on the previous year’s income and HMRC making Account-Ease can help you in filling your tax return The best way to ensure your tax return is correct and submitted on time is to use an accountant. For a fixed and competitive price, Account

At the start of 2023, the United Kingdom was changed the way penalties and interest apply to late value-added tax (VAT) returns and payments. Businesses now get a penalty point when they submit a VAT return late, and perhaps financial penalties. Here’s what you need to know about the point penalty system — and how to avoid penalties. For VAT accounting periods before December 31, 2022, late VAT returns and payments were subject to a VAT default surcharge. As of January 1, 2023, HM Revenue & Customs (HMRC) is using a penalty points-based system that simplifies and separates penalties and interest. It’s designed to be more lenient on taxpayers who make the occasional slipup while still penalizing those who repeatedly fail to meet their obligations. How does the points-based system for late VAT returns work? If you fail to submit a VAT return by the due date of your accounting period, (e.g. monthly, quarterly or annually), penalty points and financial penalties will be applied. Each time you file a late return, you will receive one penalty point. You will receive a £200 fine if you reach the threshold of penalty points for your accounting period – 2 for annual returns or quarterly returns and 5 for monthly. Here is an example for a monthly VAT return by a company: If the company fails to file its VAT return for January 2024 on time, it will receive 1 penalty point. The VAT return for February 2024 was filed on time. No penalty points were assessed. However, it still had 1 penalty point. The company files its late VAT return for March, and receives another penalty point. This makes a total 2 points. The April VAT return was filed on time, but it still had 2 penalty points. Each month, the late filing of its VAT returns in May and June earns it 1 penalty point. The total penalty points is now 4. The company will be penalized again if it fails to file its VAT return for July on time and accumulates 5 penalty points. This is the threshold of penalty points for monthly filers. The company will be charged a £200 fine at this point. The company will not get any more points because it is already above the threshold. However, they will be charged another £200 for a second late VAT return. Can I get my penalty points removed? Yes. There are two ways to remove your late VAT return penalty points: The first applies to taxpayers who met their penalty points threshold; the second to taxpayers who accrued some penalty points but did not meet the threshold. You can reset your penalty point total to zero if you have reached your threshold. Condition A: All VAT returns must be submitted on or before a certain date, which is determined by the reporting frequency. Returns for 24 months (2 VAT returns). Quarterly: 4 VAT returns in 12 months Monthly: six months of VAT returns Condition A: HMRC received all VAT returns due in the last 24 months. Once you have filed your VAT returns and paid any VAT due, you will no longer be able to accrue penalty points. Do penalties apply to late nil returns? Yes, you must file a VAT return on time even if you have no VAT to report (i.e., a nil VAT return). What are the penalties for paying VAT late? The VAT late payment penalty is on top of the £200 penalty assessed for filing a return late. These penalties vary depending on the action you take: The sooner you remit your VAT late payment, the lower the penalty rate will be. VAT late payment penalties are assessed in two different ways: The first VAT late payment penalty is calculated on outstanding amounts on day 15 and day 30. The second VAT late payment penalty is calculated on outstanding amounts from day 31 until you pay in full. Can I appeal penalty points or late payment penalties? You or your agent can appeal late filing penalties or points. How can I avoid paying VAT penalties? To avoid penalty points and late VAT payment penalties, it is best to submit VAT returns on time and make VAT payments. Account Ease helps businesses of all sizes file VAT returns and pay VAT on time. Contact us to learn more.