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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

Bookkeeping is an essential part of managing a business’s financial health, but it might seem confusing at first. Our guide explains the accounts jargon that might trip you up, and includes advice on how to get your bookkeeping right. What is bookkeeping? The process of bookkeeping involves recording all daily transactions that take place within a business in order to accurately show the income and expenditure. Bookkeeping records must show how much money your business has received and spent as well as the amount it expects to receive in the future. When you receive an invoice that you haven’t yet paid. It’s important to record the invoice in your books because you know that at some point you will have to pay. You can then plan your money needs and the dates for them (also known as Cash flow Management). What is double-entry bookkeeping? Double-entry accounting shows that every business transaction is an exchange. Double-entry bookkeeping allows you to record both sides of the exchange by recording the transaction twice. A supplier invoice, for example, means that money has been spent, but it is offset by the return of goods or services. How can double-entry bookkeeping help me to run my business efficiently? Double-entry accounting is useful for recording your business transactions because it helps you to see where the money comes from and goes. A sale, for example, means you don’t have the product or time period in your business. You can’t re-use these goods or services, even if you’ve not yet provided them. The invoice shows that something left the company, but it is offset by the resource returning to the business. This is usually the money your customer pays for the sale. If you pay for staff or buy materials, the same applies. The money that leaves the business must be compared to the resources they provide. How can I display transactions in double entry bookkeeping? Invoices sent to customers are double entries. Receiving payment for an invoice is also a double entry. The debit amount is credited to your sales when you issue an invoice. This is a double entry. When the bill has been paid, you will need to make another double entry. Your ledger is debited because your bank balance increased. Credit is applied to the debtor control to reduce the amount due by the customer. This example shows a business invoicing a client for £10 and showing it in their accounting with two double entries. It’s easy to get mixed up when referring to credits and debits with the bank. When you put money in your bank account then the bank owes you this money, so they call it a credit. From your own accounting point of view though, an increase in your bank balance is a debit. How do I know if my transactions match in double-entry bookkeeping? Each of your financial transactions are recorded as a debit and a credit. On one side of the transaction is the debit, and on the other is the credit, so they cancel each other out and balance to zero. Running a trial balance report makes sure that these entries match. Do I have to keep bookkeeping records for my business? If you run a business then HMRC do expect you to maintain good bookkeeping records which show what’s happening in your business. This is true whether you’re a sole trader, a limited company, in a partnership, a freelancer, VAT registered, or any combination of these! Your bookkeeping records form the basis of every tax return that you need to send, so it’s crucial that they’re accurate. Good bookkeeping helps you avoid uncomfortable conversations with HMRC auditors, (and any potential fines) but it’s useful for other reasons, too. Keeping your financial records up-to-date helps you keep track of any money you owe and spot areas where you could save. You’ll find it much easier to manage your cash flow, too. Recording all the money that you spend on your business means you’ll be able to claim tax relief by clawing back any allowable expenses. Huge numbers of business owners go without claiming tax relief on their business expenses every year – don’t be one of them! What records should I keep for my bookkeeping? You will find that your records show all transactions in your business. It includes all invoices you send or receive, banking transactions, expenses, and so on. Your bookkeeping information will vary depending on how big your business is and how many transactions you have. Your records must include information such as the date, amount, purpose, customers, suppliers, and the name of the customer. You may also have to deal with international transactions. This will require you to think about the tax implications, and multiple currencies. You can imagine that bookkeeping is a tedious job with all the data flying around. However, using bookkeeping software like Xero, QuickBooks, and Sage! can speed up this process. Your bookkeeping records should include all supporting documents, as well as the transaction itself. You’ll also need to include the invoices themselves, so you will not only have a list but also the invoices. Bookkeeping for sole-traders and limited companies You should also consider how the structure of your business affects the documents that you maintain. There’s no difference in law between you and your business as a sole-trader, so the profits of your business are yours. This has tax implications. There is a guide that explains the bookkeeping process for sole trader bookkeeping and partnerships . You are a separate entity from your business, and so must report both your income as well as the finances of your business. What is the difference between bookkeeping and accounting? Although the terms accounting and bookkeeping are often used interchangeably , they serve different purposes. Bookkeeping is the recording of financial transactions and cash flow management for a business. Accounting is the use of bookkeeping data to analyze and report how a business is performing. This helps make the right decisions at the right time. These are both essential to the success of any business. They make it easy

What is self-employed accounting software? If you’re self-employed, you’ll need to make sure you’re keeping records of all of your income and expenditure in order to submit accurate tax returns. Self-employed accounting software helps you do this by providing an online platform to record and store all your digital paperwork. You’ll be able to explain transactions and use them to generate tax returns such as your annual self-assessment. The best software even lets you submit your returns directly to HMRC. Why should you use it? Self-employed accounting software saves time and makes it easier to track things. You’ll also make the accountant’s job easier and faster if they are used to submitting your tax returns. This results in lower accounting fees. Many people can even do without an accountant. Using accounting software to avoid fines Accounting is one of the worst parts of running a business. Unfortunately, it’s a part of business that can’t be avoided. Your accounts must be accurate, up-to-date and submitted by the due date. You could be facing dire consequences if you do not. You can even be £100 for submitting your tax return late. You’ll be charged more if you file late. You’ll be charged interest for late payments. You don’t want yourself to be in this mess. This is where self-employed accounting software can help. FreeAgent  It is easy to use, and it’s one of the best softwares out there for those who are self-employed without any previous experience. This is why it’s ranked so highly in our list of the best self-employed software. This program has some amazing features to help you: Estimates and invoices You can store receipts and photos in Expenses. You can invoice more accurately with time tracking. Self-assessment tax return VAT or other corporation taxes You’ll find more than enough features to run most small businesses. FreeAgent isn’t the most affordable option in the market. Prices start at £19 per month. Quickbooks  Quickbooks has been designed for small businesses. This platform is perfect for sole traders and self-employed people. You can create and track invoices and organise your cash flow. It will also automatically import your transactions if you have a bank account connected. This reduces the amount of work you need to do. Quickbooks can even generate your tax return automatically. If you are self-employed, this is a lot to think about. FreshBooks FreshBooks is a platform that was specifically designed with small business owners in mind. It’s also one of the best accounting software for self-employed people. Client-based businesses will appreciate the features of this software, such as easy billing and time tracking. There’s more to it, though. The accounting side offers some great integrations to help you keep your bookkeeping and tax records up-to-date. Zoho Books Zoho Books is also highly recommended in our list of best accounting software for self-employed individuals. Zohos Accounting Platform is actually quite good. It’s probably better known as a CRM tool and other business tools. The software has many of the features found in other business tools. It is also free if you have an annual income below £35k. There is a slight learning curve, due to the sheer number of features available. Xero Xero, when it comes to accounting programs, is a powerful force. As we mentioned in our full Xero review, Xero one of the few companies that offer a version of their app on the apple watch. No matter where you are or what device, if you’ve got an internet connection you can access it. Now, that’s accounting on the go. This software was designed to cater to large and medium businesses, not to the self-employed. Some of the features are a bit complicated, and you won’t need them. Sage To tell the truth, The Sage is probably a bit too advanced for small businesses. We’ve added it because we understand that everyone has different needs. Sage’s more advanced features may be very helpful if you are planning a large growth. You might want to spend some time learning the powerful features of Sage 50Cloud now, as it is easier to stick to one platform than to switch. Read our full Sage review for more information. What are the accounts that self-employed business owners need to maintain? Start with the records that independent businesses such as yours should (and must be!) keeping. Not every report will be examined. You will need them to calculate accurately your profit or loss on all of the paperwork and tax returns you’ll complete. You’ll need to deal with paperwork if you want your business to succeed. Once you have calculated the amount, keep your documents. Keep them safe for a minimum of 5 years following the submission of your tax return. You may be asked at any time to give them to HMRC. Included in this is: All receipts and stock Bank statements, chequebook stubs The sales invoice, the bank slip and the till roll

Small businesses play a major role in driving economic advancement and innovation within the business environment of the UK. They are the backbone of our economy and contribute significantly in terms of job creation, and innovation, adding to the country’s national income, and its export and import balance. Furthermore, small businesses not only augment economic viability but also contribute significantly to maintaining the market dynamics. While they do not have individual power to augment the market dynamics, they can swiftly adapt to market changes. Having said that, there are some perquisites to this adaptability. A good accounting system is one of them and probably the most important one. Partnering with Accountants for Small Businesses allows the business to manage the records but also streamline the finances. When it comes to efficient management of the business, one cannot overstate the significance of accountant services for small businesses. Robust financial management practices like proper bookkeeping, accounting, strategic planning, and likewise serve as the guiding compass for these small businesses to manage complex financial requirements. In this comprehensive guide, we will discuss in detail the role of an accountant for small businesses. If you are planning to get an accountant for a small business in the UK, this guide will help you make a well-informed decision. The Responsibilities of an Accountant in a Small Business Setting Generally, small businesses are called for to function with limited spending plan margins, due to which correct and calculated financial management is a non-negotiable for their growth and survival. Prior to you zero in on your local business accountant in London, allow us take a better check out recognizing just how getting an accounting professional for a local business helps. Accurate Record Maintenance: Accounting professionals for small business help preserve thorough records that provide you access to a riches of financial information which can be made use of for fad analysis and critical planning. In addition to serving regulatory needs, these thorough economic documents are important for reviewing business’s financial standing, determining locations for cost decrease, and projecting future growth. The dynamic globe of entrepreneurship necessitates well-informed decision-making, and accountants for small companies act as custodians of economic records and are important in managing unpredictability and assisting business in the direction of long-term profitability. Budgeting and Forecasting: When it pertains to making economic projections and spending plans, accounting professionals for small businesses in the UK can be of terrific assistance. They supply much-needed help to small businesses in forecasting future patterns and therefore getting ready for them. By taking a look at historical monetary data, accountants aid services in developing reasonable financial goals. As necessary, business allots resources, handles cash flow, and adapts to market problems. Consequently, it can likewise efficiently assign and distribute a budget to back its features and operations. Tax and Other Regulatory Compliance: Taxes are a complex and layered world, which can be difficult to navigate. This is especially true for small business owners. Accountants are essential to small business owners in making sure that all tax laws are followed, available credits are realized, and eligible deductions are considered when calculating taxable income. Small business accounting firms in London are responsible for keeping up to date with the latest tax laws. They can therefore anticipate, explain, and cushion the impact on the business of any changes to tax laws. Tax planning can lead to substantial savings for the company, which helps preserve and improve its financial health. Financial Analysis: Accountants for small businesses in the UK do much more than crunching numbers and maintaining records. They analyse financial statements and based on their evaluation provide valuable insights into the business’s performance, risks and opportunities. They take into account various factors like economic drivers, past financial data, current industry trends, performance of the competitors, etc. By doing a thorough analysis of all these factors, accountants for small businesses help these businesses curate the right strategy for their growth and sustainability. Audit and Reporting Support: Accountants for small businesses also feature know-how in regulatory standards. They provide significant assistance in making sure that neighborhood and international reporting regulations are complied with. Precise and timely coverage signals a dedication to visibility and honest monetary practices. This not only fulfills lawful demands but additionally fosters stakeholder trust fund. Accounting professional solutions for small businesses help them work out intricate reporting and auditing functions while keeping monetary compliance. Financial Advisory Support: In the complex business environment of the UK especially London, accountants are indispensable advisors. They offer tailored services to help small businesses navigate the complexities of business with confidence. Small businesses can benefit from their strategic and specialised services, which help them to effectively manage difficult situations. They offer more than just traditional services such as bookkeeping services and accountancy. They also provide insights into regional trends, regulations and industry dynamics. Small businesses can benefit from quality advisory services and position themselves strategically for long-term growth with the help of these services. When Should a Small Business Get an Accountant? So what is the correct time or under what conditions should you obtain an accountant for a small business? The optimal utilisation of an accountant’s solutions for small business can be done when you understand when to companion with an accountant, to begin with. While there can be numerous such instances or circumstances, where partnering with a professional like an accounting professional will be best for your small company, here are some usual circumstances, where it becomes necessary to take the aid of an accounting professional for a small company. At the Onset of the Business: Accountants for small businesses help business owners navigate the challenges of business formation with ease. You will receive accurate information on everything from choosing the right business structure to dealing with initial tax requirements. This ensures that your new business has a solid financial foundation. A business created in conjunction with an accountant will also ensure accurate documentation and compliance. Small Businesses Experiencing Rapid Growth: The financial complexity of small businesses

With what could be the final budget before the general election, Chancellor of the Exchequer Jeremy Hunt today delivered his Spring Budget to. The House of Commons to announce the Government’s tax and spending plans. After lots of speculation over the last few days around tax cuts ahead of the forthcoming election. Reports suggested that several measures were being considered to raise money to fund this, including raising duty on flying first class. It was expected that further permanent cuts to National Insurance would be announced and potentially an income tax cut as well with Jeremy Hunt aiming to give “a message of hope in challenging times” and achieve heathy long-term economic growth, good public services as well as reducing taxes. Another big talking point ahead of the Spring Budget was the possibility of taxing vaping. As well as examining scrapping non-domiciled tax status, which the Treasury had declined to comment on. Additional decreases in National Insurance Contributions In response to the Autumn statement, additional measures to reduce taxes were announced. From the 6th of April, the Class 1 Employee National Insurance Contributions (£1) will be reduced by 2p from 10% to only 8%. The Class 4 National Security Contributions will be reduced from 8% to just 6% for those who are self-employed. This equates to a £450 annual saving for an average employee, and a £350 savings for a typical self-employed individual. Mandatory VAT Registration Threshold Increased The VAT registration threshold will be increased from £85,000 to £90,000 from 1st April 2024. This is the first time this threshold has increased in 7 years which will mean thousands of businesses will no longer be required to register for VAT. Permanent Expensing for Leased Assets The draft legislation to boost business investment will be introduced as soon it is affordable. Changes to Child Benefit The government is looking to reform the high-income child benefits charge in the future. It will change the system to one that applies to all households. Rather than the current system where the charge is applied if the household’s highest earner earns more than £50,000. The threshold for the high-income child benefit will begin at £60,000 in the interim and gradually increase to £80,000. The high income child benefit fee currently starts at £50,000, and is fully repaid when it reaches £60,000. Non-Domicile Tax Reform A rumoured change prior to the budget, the regime whereby individuals were able to avoid paying tax on their foreign income is to be scrapped. And replaced by a new residency based system from April 2025. Under the proposed new system, there would be no taxation on foreign income for individuals arriving in the. UK for the first four years after which regular UK residence taxation would apply. There will be a transition period for those currently utilising the “non-dom” system. Fuel And Alcohol Duty Frozen In good news for motorists, the Fuel duty freeze previously introduced in 2022 was temporary and fuel duty would have increased by 13% this month. But the Chancellor is maintaining the 5p cut for a third year and keeping it frozen for another 12 months. Alcohol duty was frozen in the Autumn statement and this freeze is now extended until February 2025 which will continue to cut costs for pubs, bars, restaurants, nightclubs and more. Changes for Landlords and Property Investors In news that could impact landlords and property investors. The multiple dwellings relief will be abolished for those that purchase multiple properties at once. The higher Capital Gains Tax rate on residential property will be reduced from 28% to 24%. With the aim of increasing the number of transactions to ultimately generate more revenue for the Government. The Furnished Holiday Lettings Relief scheme will also be abolished from April 2025. Other Key Points Include: £100m of levelling up funding to be allocated to support cultural and capital projects and community regeneration across the country NHS productivity plan to be funded in full at a cost of £6bn with a focus on reducing waiting times and improving service £200m will be provided to extend the recovery loan scheme to help small business and SMEs A new tax will be imposed on vapes, tobacco duty will increase and the tax on non-economy flights will increase Planned growth in day-to-day spending will be maintained at 1% in real terms Additional tax credits of 5% and a 40% tax relief for eligible film studios to boost the creative industry in the UK £105m to be invested over the next 4 years to build 50 new special free schools Guaranteed rates to be paid to childcare providers over the next 2 years as part of the Government’s boosted childcare offer to help more people into employment with 30 hours of free childcare being provided for working parents How Account Ease Accounting Can Help You As the UK’s most trusted accountants, our experts can help you make sense of the Spring Budget and how it could affect your business. Account Ease accountants are on-hand to answer any queries you have regarding the Budget, your accounting needs, tax-optimisation, and much more. If you need an accountant that you can trust with your finances, call us today on 0208 133 4599 or request a call back here.

VAT can be confusing for those who are self-employed, and it is understandable that they may overlook the issue. When you start your own business, you’ll be focused on getting established and growing the business. You will probably be below the £85,000 threshold for VAT registration when it becomes mandatory. You could of course register voluntarily if you’re under the threshold but you might be unsure if this is the best course of action or might be wary of the complexity of the VAT returns process and the associated admin time drain, as well as potential penalties for non-compliance. There are, of course, both benefits and challenges of being VAT registered. One of the main challenges is the administrative burden that comes with completing your quarterly VAT returns. The majority of VAT registered businesses operate through the VAT standard rate scheme, but there are some drawbacks to it from the perspective of self-employed people and small businesses. Before exploring the VAT flat rate scheme, let’s get a definition-check on the standard rate scheme. What does the Standard Rate Scheme entail? If you choose the standard VAT rate scheme, the difference between the quarterly input VAT and the output VAT is your VAT liability. Input VAT is how much VAT you pay for your purchases and output VAT is what you charge as VAT on your sales. You must subtract from the total input VAT paid by you on purchases the amount you have charged as output VAT. If output VAT is greater than input VAT, the resulting figure represents your VAT liability that must be paid to HMRC. HMRC will refund you the difference if input VAT is greater than output VAT. This is called a refund return. Most self-employed individuals are very busy, and have little time for administrative work. Calculating VAT returns and complying with the VAT standard scheme is not an easy task. Calculations for the VAT standard-rate scheme are complex and onerous, which can lead to a heavy administrative burden. This is why the VAT flat-rate scheme was introduced in the year 2002. What does the VAT Flat Rate Scheme involve? The VAT flat rate scheme was designed to simplify and streamline the charging and claiming of VAT for small businesses and self-employed individuals. How flat rate differs from standard rates: Calculate your VAT liability by applying a fixed-rate percentage to your VAT able turnover Additional turnover is generated by the difference between the VAT that you pay to HMRC, and the VAT that your customers charge. However, you can only claim VAT on certain business expenses, such as capital purchases that cost more than £2,000 and pre-registration costs. For your first registration, the fixed rate VAT percentage is reduced by 1%. You can join the VAT flat-rate scheme if your business has VAT registration and you do not expect your VAT-taxable revenue to exceed £150,000 over the next 12 month. You must leave the scheme if your VAT-inclusive annual turnover is more than £230,000 or you anticipate it will be higher. The flat rate scheme is based on the sector of your business. Rates range from 4% to 14.5%, except for limited-cost traders. Limited Cost Traders and The VAT Flat Rate Scheme If your business meets the criteria below, you may find that the flat rate scheme is beneficial. Spend less than 2% on goods of your annual turnover, including VAT If your cost is higher than 2%, you spend less than £1,000 on goods annually Capital expenditures are items such as fuel, vehicles, parts, and food or drinks for your staff or business. You are a limited-cost trader and you will be subject to the special flat rate of 16.5%. Limited cost traders tend to be businesses that provide a service more geared towards labour than retailers or professional services. It is important for limited cost traders to recheck eligibility every year against the criteria above. What are the advantages of the VAT flat rate scheme? You will save time by applying the VAT to your total turnover. Rather than just the VAT you charged and paid for your purchases. This scheme also offers a 1% VAT reduction for the first year you register. You will also have better financial clarity, as you’ll know what percentage of turnover is due to HMRC. It also gives peace of mind because it will be easier to stay compliant and therefore less likely to receive penalties from HMRC. VAT Accounting with Account-Ease Many small business and self-employed owners have questions about VAT. Should you register even if your turnover is lower than the registration threshold? What are the advantages and disadvantages. What is the best VAT scheme for your business? When deciding which VAT scheme will work best for you. You should consider a number of factors, including your turnover as a business. The amount of tax you can claim under the standard rate scheme and your spending on goods. You also need to take into account your sector of business or industry, how much admin capacity you have, and your level of expertise. Compare your VAT liability on the flat-rate Scheme with standard rate. This is where Account Ease comes in. As a Account Ease client you will work with your own dedicated accountant who will be able to guide you through the VAT landscape. We often recommend that our clients register for VAT even if turnover is below the mandatory registration threshold. But the advice and guidance you receive is always based on your specific circumstances and business goals. We will ensure that you are registered on the correct VAT scheme and we will also handle all of your personal and business accounting needs with a guarantee same-day response to all your questions. Your dedicated accountant will calculate the VAT liability every quarter. This is then reported to HMRC in your VAT Return. Call us today on 0208 133 4599 to speak with one of our expert VAT accountants.

There are plenty of factors to take into account if you want to become a successful buy-to-let landlord, but one that often gets overlooked is tax efficiency. Putting a few tax saving strategies for landlords in place may not be quite as glamorous as hunting down the perfect property, but when it comes to saving cash it can make a huge difference to your bottom line. That’s why we thought it would be a good idea to share a few tax saving tips for landlords with you here on our blog. Armed with these simple bits of advice, you’ll be able to significantly (and legally) reduce your tax bill as a landlord, which will help get your buy-to-let business in better shape in time for next year’s tax return. Set up a limited company: While it might require some planning creating the company as a limited company is an excellent way to lower the tax burden of landlord. In addition, you’ll be able buy properties by way of the business (which allows you to offset the cost against your profits) Additionally, you’ll be able to engage you or someone else to oversee the properties that are part of the portfolio. This particular tax-saving technique isn’t suitable for all however, if it does work for you, the savings could be huge. Contact Account Ease to see whether you could benefit from the transfer of your property to an LLC. Extend to reduce: Putting money into your existing properties will help you avoid hefty stamp duty charges and should see the value of your portfolio rise at the same time. Recent changes to development rights means that you are now able to extend the property you have in place more than you did previously and this should result in an increase in your monthly earnings. If you consider the cost of the region where your rental property is located, substantial benefits can be realized by the expansion or extension of your property. A thing to keep in mind is that if undertaking significant changes that will increase occupancy, you could be affected by the forthcoming revisions to HMO regulations. In October (2017) properties that has 5 plus tenants is going to have to obtain an HMO license, which means passing the required inspections and committing to the expense of obtaining a licence as well. Therefore, make sure you examine the local council’s licensing regulations prior to undertaking any costly building project that could cause a change in the status of your rental property. Make use of all available tax bands Another option to cut the tax burden of landlord is to transfer your property into your partner. Capital Gains Tax generally is not a concern when assets are shared between spouses, which means you can effectively take advantage of their tax rates that are lower. It is also possible that you’ll be in a position to pay less tax on the rental income if their tax bracket is less than your own. If the property isn’t a home with a mortgage to it and you’re not gaining any financial benefits from the transfer, then you don’t need to pay stamp duty. Make sure you are getting the most from your property This may seem like a bit of a no brainer at face value, but you’d be amazed at just how much money is left on the table each and every year by landlords who do not have their rental properties reassessed. Getting your rental property revalued can make a huge difference, not only in terms of how much it is worth, but also the way in which your business is viewed by outsiders. Having a more accurate assessment of how much your rental property is worth will strengthen your hand against lenders and get them to reevaluate your loan to value. Should your rental property price increase, your loan to value will obviously go down…and that could mean more choice and a better interest rate for your buy-to-let business. If you would like an accurate assessment of your property’s value, give our valuers a call on 0208 133 4599 to get started. Don’t be shy with your expenses Now, obviously we’re not suggesting anything untoward here, but we do recommend that you claim everything you are entitled to if you want to become a tax efficient landlord. There are plenty of landlords who could reduce their tax bills simply by being a little more diligent about their expenses, so our advice is to make sure you claim for everything. Keep every receipt and speak to your tax advisor or accountant about exactly what you can and cannot claim for…you’ll likely be surprised by how quickly these landlord expenses mount up! For example, things such as the costs of keeping a home office and your letting agent’s fees can all be offset against your profits, so why not claim for them? Consider short-term lets If you are in between tenants, there are ways in which you can lower your landlord tax bill. Costs such as your council tax and utilities can all be claimed as expenses during this time, but wouldn’t you rather be earning money rather than saving? Sometimes it can be worth considering the option of taking on a short-term let during a void period in order to get some money coming in. As ever, if you are based in East London or West Essex, we’d be delighted to assist, so give our lettings team a call on 020 8989 2091 today. Be savvy when you sell Too often, landlords lose money when they sell a rental property simply because they do not take full advantage of the available tax relief on offer to them. This is especially true of landlords with multiple properties, as they can reap the benefits of the 0% Capital Gains Tax band each and every year should they decide to sell one of their homes. Currently, the tax free figure stands at £11,300, which is a pretty good saving

Running a successful sole trader business requires a lot of dedication and hard work. As a sole trader, you are responsible for all aspects of your business, including bookkeeping. While it may seem overwhelming, bookkeeping is an essential part of managing your business finances and ensuring compliance with tax laws. In this guide, we will explore the importance of bookkeeping for sole traders and provide practical tips on how to set up an effective bookkeeping system. Whether you’re a seasoned sole trader or just starting out, this guide will help you navigate the world of bookkeeping and make informed financial decisions for your business. Understanding the Importance of Bookkeeping for Sole Traders Bookkeeping is an essential aspect of running a successful sole trader business. Accurate bookkeeping provides a clear picture of your business finances. Without proper bookkeeping, it becomes challenging to track your business expenses and income accurately. As a result, you may miss out on potential tax deductions and overstate your profits. With accurate bookkeeping, you can analyze your financial data to make informed business decisions. Bookkeeping helps you keep track of your business expenses and income. By maintaining a detailed record of your expenses and income, you can easily monitor where your money is going and identify areas where you can save costs. This knowledge helps you optimize your spending and increase your profitability. Proper bookkeeping ensures compliance with tax laws and regulations. As a sole trader, you are responsible for reporting your income and expenses accurately to the tax authorities. Failing to do so can result in penalties and legal consequences. Bookkeeping allows you to maintain all the necessary records and documentation required for tax purposes. Without bookkeeping, it is difficult to make informed financial decisions. Bookkeeping provides you with up-to-date financial information, allowing you to evaluate your business’s performance and make strategic decisions. You can assess your cash flow, identify trends, and plan for future growth. Choosing the Right Bookkeeper for Your Business When it comes to bookkeeping for your sole trader business, it’s crucial to find a bookkeeper who can meet your specific needs. Here are some tips for choosing the right bookkeeper: Consider the qualifications and experience of potential bookkeepers Look for bookkeepers who have relevant qualifications and experience in working with sole traders. This ensures they understand the unique challenges and requirements of your business. Ask for referrals and check reviews Reach out to other sole traders or small business owners for recommendations on bookkeepers they trust. Additionally, check online reviews and testimonials to get a sense of a bookkeeper’s reputation. Choose a bookkeeper who understands your needs It’s important to select a bookkeeper who takes the time to understand your business goals and financial needs. This understanding will help them provide tailored bookkeeping services. Ensure the bookkeeper uses modern bookkeeping software and technologies Find out what bookkeeping software and technologies the bookkeeper utilizes. It’s essential to work with someone who keeps up with industry advancements to streamline your bookkeeping processes. Discuss pricing and payment terms Before finalizing your decision, have a conversation with potential bookkeepers about their pricing structure and payment terms. Make sure it aligns with your budget and preferences. Setting up an Effective Bookkeeping System When it comes to bookkeeping for sole traders, setting up an effective system is crucial for maintaining organized and accurate financial records. Here are some steps to help you establish a reliable bookkeeping system: Create a separate bank account for your business transactions:  Having a dedicated bank account for your business will make it easier to track expenses and income. Establish a consistent record-keeping system: Create a system for organizing invoices, receipts, and expenses. This could include using folders or digital folders to store and categorize your financial documents. Set up a digital or physical filing system: Choose whether you prefer to keep your records digitally or in physical files. Whichever option you choose, make sure it is organized and easy to access. Consider using cloud-based bookkeeping software: Cloud-based software offers the convenience of accessing your financial records from anywhere and provides automatic backup for data loss prevention. Implement regular backups: Regularly backup your bookkeeping files to a secure location to ensure you don’t lose any important data. By following these steps, you can establish a solid foundation for your bookkeeping system, making it easier to stay organized and maintain accurate financial records for your sole trader business. Organizing and Sorting Your Business Expenses Properly organizing and sorting your business expenses is crucial for accurate bookkeeping. Here are some tips to help you effectively manage your expenses: Categorize your business expenses into different expense types By categorizing your expenses, you can easily track and analyze your spending. Common expense categories include office supplies, travel expenses, utilities, and marketing expenses. Create a comprehensive list of expense categories that best reflect your business’s needs. Keep detailed records of each expense, including receipts and invoices It’s essential to have supporting documentation for every expense. Keep all receipts, invoices, and payment records organized and easily accessible. This will help you during tax season and provide proof of expenses if needed. Regularly review and reconcile your expense records to ensure accuracy Set aside time each month to review and reconcile your expense records. Check that all expenses are correctly categorized, and resolve any discrepancies or errors. This practice will help maintain accurate financial records. Consider using expense tracking tools or apps to simplify the process There are various expense tracking tools and apps available that can automate and simplify expense management. Find one that suits your business’s needs and integrates with your bookkeeping software for seamless data transfer. Consult with a bookkeeper to ensure you are correctly classifying your expenses If you’re uncertain about how to classify certain expenses, seek guidance from a professional bookkeeper. They can provide valuable insights and ensure your expenses are properly categorized for accurate financial reporting. Tracking and Recording Your Business Income Properly tracking and recording your business income is essential for maintaining accurate

What’s the reason for Tax Digital? Making Tax Digital (MTD) is designed to make it simpler as well as more effective for companies as well as individuals to track and report the tax they owe to HMRC. In the new regulations, HMRC legally requires businesses that are eligible to keep records of transactions electronically and send tax returns to HMRC with Making Tax Digital compatible software. The new rules won’t affect the normal deadlines for VAT returns or the information you have to provide. You can find out the date your next tax return is due by checking the on-line VAT account. What information must be kept digitally? MTD can alter your bookkeeping process as well as the way your business records data. It is essential to be able to keep digital records and the digital copy of your transactions. Further information on the records you have to keep in digital format on the website of HMRC. I already keep digital records. What’s different about Making Tax Digital for VAT?  Every VAT-registered business must keep books, records and accounts Most are maintaining these electronically. With MTD the most significant change is that you will need to make use of the Making Tax Digital software to file your VAT return with HMRC. Here’s what you’ll need to do in order to be compliant with the new law so that you don’t get caught with penalties for not complying. Create a strategy It’s time to be clear about your strategy. In the event that you’ve got an accountant looking for your bookkeeping, talk with them about what the changes will mean. For instance, you might have to establish an approach to share data and records in digital format. If you manage your own accounts with spreadsheets, manual records or paper-based bookkeeping, or if you’re keeping your financial records digitally, you’ll need to utilize MTD suitable programs to upload your data to the brand HMRC website. What software is compatible? It is essential to preserve your records digitally using the VAT-compliant software that integrates with HMRC systems. Enables users to keep and update records such as VAT receipts and invoices electronically. The item has to be capable of: Keep and archive digital records as required by the regulations. make VAT returns using these documents Connect with HMRC via an electronic link Certain MTD solutions include the ability to bridge. Which allows you to digitally connect the data from a spreadsheet into HMRC’s system. Selecting MTD compatible software You won’t be registered for VAT MTD immediately. This procedure instructs HMRC to move your current VAT accounts from the previous HMRC computer system and transfer it into the current MTD computers. After you have completed this step, it may be HMRC as long as 72 hours in order to copy your account over. It’s a one-time procedure that takes about three hours in total. To join you’ll need the following items on hand: Your business email address Government Gateway user ID and password ( if you don’t have one, you can make new account) VAT registration number The most recent VAT return Is Tax Making Digital Only in relation to VAT? No. from April 2026, self employed landlords and individuals with earnings of more than  £50,000 will need to keep electronic documents. Report quarterly reports on their expenditure and income to HMRC via MTD-compatible software. Those earning between  £30,000 and  £50,000 will have to start this process beginning in April 2027. HMRC includes an online webinar that you can view online to find out more about the procedure and how to join this Making Tax Digital for Income Tax Self-Assessment Pilot. HMRC is also provides helpful videos. Resources and webinars targeted at entrepreneurs to find out more about how you’ll be affected and what actions you’ll need to follow.

There’s a lot to juggle as a sole trader in the UK, and a solid accounting foundation is just as important for sole traders as it is for larger businesses. As a sole trader, you need not only to  provide services in your area of expertise, but also to handle marketing and manage your own financial accounts such as recording expenses and tracking income. Fortunately, UK sole trader accounting software can help you stay organised. The best sole trader accounting software can help you keep accurate records, making it easier to submit your    to HMRC each year. Here we cover what to look for in the best accounting software for sole traders, and present our pick of the six best accounting apps for sole traders. Why should you use sole trader accounting software? If you’re a sole trader, you might find that there isn’t enough time in the day. The manual entry of every sole trader’s details for accounting and bookkeeping into spreadsheets can take hours every week, especially if you handle a large number of transactions. Accounting software for sole traders is specifically designed to help save your time as well as money, by automating keeping track of expenses, creating invoices, and reconciling bank accounts. Here are some benefits of the top software for accounting sole traders: It stores all of your essential information about sole trader bookkeeping in one location and ensures that no receipts go out of your hands. It will automatically track expenses and reduce the tax burden. It decreases the chance of human error. It aids in forecasting the flow of cash It helps you stay on the right side of tax on sole trader obligations Accounting considerations for sole traders Any sole trader accounting software can be used, but be aware of your unique tax considerations. One of the main benefits of being registered with HMRC as sole trader is that you do not need to stress about filling in annual accounts or filing corporate tax returns. The registration is completely free and you don’t have to adhere to the same rules as a limited company. This helps cut down on paperwork.   However sole traders must fulfill certain obligations Keep accurate records of all invoices and other expenses Send Tax returns for self-assessment With the most effective accountant for sole traders, it’s possible to hit the goals and remain in the forefront of tax compliance concerns. Best sole trader accounting software The self-employed have a lot of options when it comes to selecting one of the accounting software for sole trader. Here are our six most popular choices: Xero Xero is an all-purpose cloud-based accounting software that was created in the year 2006. It’s loaded with features that can benefit small-sized companies, as well as sole traders. While there are a variety of plans available but the Starter Plan at just PS12 per month is ideal for the majority of sole traders. It includes everything you need to keep your accounts up-to date and to file tax returns. One of the potential drawbacks that comes with this Starter Plan is the 20 invoices per month limitation, meaning you’ll need to keep an the workload in check in the event that you have to upgrade. There are other advantages, though, such as: Access from any location mobility on the go multiple payments processors Tracking inventory automatic report generation Sage Sage Business Cloud Accounting is an ideal choice for people with no accounting experience. It is setup quickly, and if you’ve got any concerns, Sage has 24/7 support via phone and online. Similar to Xero. The Basic Accounting Start Plan will suit the requirements of a majority of sole traders. It cost of PS12 per month, however it could be a problem for those who have higher work loads. It comes with tools for calculating your tax returns for VAT, if applicable. Other benefits include: Create and create invoices and reconcile bank accounts Track payments VAT submission KashFlow KashFlow is designed in making the accounting process as simple as is possible for sole traders and freelancers. The user-friendly dashboard gives you the most comprehensive overview of your financial position and integrates with a variety of apps, including the most popular e-commerce platforms such as Amazon as well as Shopify. It’s also perfect to expand as your business expands but you’ll eventually have to upgrade to the Starter plan, which costs $9 per month. This is only able to send 10 invoices per month. If you’re still not convinced you should give it a go initially for free. The benefits include: easy to setup Work from any location automatic updates to VAT Tax assistance FreeAgent With a starter plan of PS19 per month specifically made to cater for entrepreneurs who are sole proprietors, FreeAgent includes all the tools you require to maintain your finances in order. The standard features include a selection of eight invoice templates that are professional as well as time tracking sheets to assist with invoices and expense tracking that is automated directly through a live feed of your bank. Additionally, you can utilize the application to fill in and submit your Self-Assessment Return. Invoicing cost tracking self-assessment Profit share calculation QuickBooks QuickBooks is among the most popular business accounting software applications, and is equally useful for solo traders, as well to larger businesses. It’s user-friendly at any level, and it comes with a Simple Start Plan for PS12 per month gives you everything you require to monitor the flow of cash and ensure that your taxes are organized. You can also track sent invoices and chase late payments to boost the flow of cash. Tracking of expenses and income Join multiple accounts at one time invoice tracking Tax assistance Zoho Books Zoho Books is another one of the top accounting software designed for sole traders. It includes a 14-day trial period of the program. There are a lot of reporting features that are available, as well as the capability to monitor the total cost of expenses and keep track of invoices, so you are aware of what your cash flow is and how it