“I have found Caroline to be highly professional, efficient, knowledgeable, friendly, and helpful in my dealings with her, and have no hesitation making a recommendation.”
“A fabulous accountant with a personality and a sense of humour? An oxymoron I hear you cry! But not at all. Caroline Hinde is all of that! For a small business owner like me who knows next to nothing about self assessment and has no inclination to further their knowledge, what I need is someone who simply takes care of it all. That’s exactly what I got from Caroline; she is efficient and friendly and is incredibly knowledgeable. Nothing is too much trouble and she has taken all the stress out of the whole process for me. I can’t praise Caroline highly enough and would recommend her to anyone I know and indeed have done so whenever I can. Look no further than Caroline, and you will not be disappointed.”
“Caroline has recently finished my accounts for me. She has done an excellent job of pulling everything together and I felt both relieved and confident, that they were submitted correctly.
I am so pleased that I asked for carolines assistance in helping me with my accounts. Even though I’m just a small business, it was nice to have that reassurance , that everything has been done correctly. It was money well spent!
I found Caroline to be very approachable and helpful in her advice. A lovely person to work with – thank you!”
Ok, so you’ve realised another tax year has ended. You’ve barely recovered from your scramble to submit your tax return on time in January, surely it’s not time for all of this again? Every year you swear it will be different, but every year you employ the ostrich technique until the last possible minute. You always have a sick feeling after you click on the submit button – “I’m really not sure that’s as accurate as it should be”…..
Well, it’s decision time. There are two roads you can take from here; the first is familiar territory and will result in you losing the last two weeks of January and feeling a panicked mess. The second is different. It requires a bit of effort. So you decide to make a change; to do things differently this year. But then you think; “BUT, it’s ages until January, I’ll look at it in the Autumn”… Sound familiar?
So what if I told you there are things you can do NOW which will make your life easier come tax return time? Things you can put in place which will mean not only do you tie up 2016/2017 in good time, but that you knock 2017/2018 into shape and end up with a better idea of how to manage your business finances!
1. Go through your receipts now. Put them into piles, depending on how they were paid – one pile for things paid for from your business bank account (a bank account you use for your business, if you have one), and the other for things you paid for with your own funds / cash. Some people find it helps to use one envelope for each month.
2. Get your bank statements (for the business account) together. You might need to download these from your internet banking account. Keep them in a file / envelope with the bank account receipts.
3. Sort out your mileage records. It doesn’t matter how you keep them, as long as you keep them! The chances are this will involve going through your diary. It’s boring, so start chipping away at it now. You need the date, the purpose of the journey and the postcode of where you went to. Don’t forget the return journey! There are various calculators online which will help you to work out your mileage, and some of them will allow you to download your journeys and print them for your records.
4. Ok, now it’s time for money in – your sales. If you pay money into the bank, try to keep a record of what you have paid in, and where it came from. If your customer invoices are numbered, this can be as simple as writing the invoice number on the back of your paying-in slip stub.
By going through these things now, when you sit down to do your tax return you will already have done a lot of the ground work for working out the figures. Alternatively, if you don’t want to do your own tax return, your records are better organised, the chances are you will already have saved yourself some accountancy fees!
Food for thought…. The tax return you submitted on 31st January 2017 was made up of figures from your business year that ended 5th April 2016. This means that if you left it until the last minute, you only became aware of the performance of your business a whole nine months after the year ended. That’s a long time to be behind in terms of knowing what’s going on in your business. In order to grow your business, there are two things to look at; bringing more money in and reducing what goes out. If you can see what’s happening in your business month to month, you will be in a far better position to react and to implement changes.
Did you know?
There is a wealth of software out there (some free, some paid for) that can help you keep on top of your accounts. If you are still using paper invoices (or Word / Excel), consider using some software for this instead. Invoicing software can do a whole host of things which save you time and ensure your records are accurate, such as numerical sequencing and emailing the invoice directly to your customer. If you tend to collect lots of small receipts, software with an app could help you keep track of these expenses.
Even if you implement just one of the suggestions above, you will be better organised to take on your next year end 🙂
If you want to make some changes but are unsure what would help you and are wary of fees / spending lots of time, get in touch for a chat.
We will talk through what you need and your budget. From there we can help you find a solution that works for you and your business.
Small changes can make huge savings in the long term!
On 1st April 2017, changes to the Flat Rate Vat Scheme (FRS) will come into force.
The Flat Rate VAT Scheme was designed to relieve the administrative burden on small businesses (with a turnover excluding VAT of less than £150,000) of accounting for VAT on everything they buy and everything they sell. The scheme allows businesses to apply a fixed rate to their VAT inclusive turnover for the period (usually quarterly) and pay that amount to HMRC. This means that they don’t need to spend hours accounting for VAT on all of their purchases. The rate applicable depends on the type of business (e.g. accountancy / mechanical / retail etc).
Here is an example of how the scheme currently works for a business using a Flat Rate of 14.5%
Net Sales for the quarter: £10,000
VAT on sales for the quarter: £2,000
Gross Sales for the quarter: £12,000
VAT payable to HMRC for the quarter: £12,000 x 14.5% = £1,740
You can see here that the amount of VAT to pay to HMRC is less than the VAT charged to customers in the quarter. This is because HMRC assumes that if that type of business had been using the standard VAT scheme and had accounted for the VAT on all purchases as well as its sales, the resulting amount due to HMRC would have been approximately £1,740.
The problem arises where businesses who have very few outgoings when compared to their sales figures use the FRS to their advantage. This can be illustrated as follows, where the business in question made the same amount of sales as above (£12,000 including VAT) but its expenditure for the quarter was only £600 including VAT).
VAT on sales for the quarter: £2,000
VAT on purchases for the quarter: £100
VAT Payable to HMRC for the quarter (business using Standard Scheme): £1,900
VAT Payable to HMRC for the quarter (business using 14.5% FRS): £1,740
Here, it shows that the business in question would actually profit from using the FRS. The following changes are being put in place to prevent these situations and ensure that the FRS is used for its original purpose which is to reduce the administrative burden on businesses.
So, what’s changing?
From 1st April 2017, so called “Limited Cost Businesses” will need to apply the new Flat Rate of 16.5%.
What is a Limited Cost Business?
A business whose VAT inclusive expenditure on “goods” is;
Below 2% of their VAT inclusive turnover; or
More than 2% or their VAT inclusive turnover but less than £250 quarterly (£1,000 annually).
These are literally goods and not services. For example, for a hairdresser buying shampoo, colour, hairspray etc, these would be classed as goods. On the opposite side, software licenses bought buy an accountant would be classed as services and as such are excluded from the calculations.
What about Advertising costs – are they goods?
If goods are bought which will be given away – such as promotional pens – these are excluded from the calculations.
What about Stationery costs?
Items such as stationery, printed letterheads are classed as goods and are allowed within the calculations.
Are Postage costs allowed?
Postage stamps are a service and are exempt from VAT which means they are excluded from the calculations.
Can Vehicle Costs be included?
Except where the business is one that carries out transport services – e.g. a taxi business – and uses its own or a leased vehicle to carry out those services, costs of vehicles, vehicle parts and fuel are excluded from the calculations.
What if I buy new assets for the business?
Capital expenditure is excluded from the calculations.
I’m in my first year on the FRS – do I still get my 1% rate reduction?
Yes. Whether you are affected by the changes or not, your 1% reduction for the first year on the FRS still applies.
How do I find out if I’m affected?
1. Speak to your accountant.
2. If you don’t have an accountant, there is an online calculator on HMRC’s website which you can use to help you work out where you stand. You can find the calculator here.
HMRC have advised that they will be writing to businesses currently using the FRS, although if you believe you may be affected it may be prudent to approach your adviser or use the calculator before you receive the letter.
Ok, so I’m affected by the changes. What are my options?
1. Use the new Flat Rate of 16.5%
2. Apply to leave the FRS and use the standard scheme.
3. If you are below the compulsory registration threshold (currently £83,000), you may wish to de-register for VAT altogether.
How do I know which is the right option for me?
If you have an accountant, speak to them. It may be worth doing some calculations to help you decide the best course of action for you to take. It may be that you are no worse off by leaving the FRS and moving to standard scheme on paper BUT there will be additional time required for processing all of your purchase receipts each quarter. This may result in you needing to change software supplier / starting to use software. If you pay your accountant or bookkeeper to complete your VAT Returns for you, their fees will probably increase too. It’s important to take all of these issues into account when making your decision.
Where can I find more information on the changes?
VAT Notice 733 is available on HMRC’s website here.
Does the idea of selling terrify you? When you started up your business, you probably didn’t know you’d have to be a salesperson too! There are aspects of our work that take us out of our comfort zones, and for many, sales is one of them.
We’ve all experienced pushy selling at some point in our lives. The person who thrusts their business at you, insists you need what they are selling, doesn’t listen to you and doesn’t take no for an answer.
The key word here is “listen”. In order to sell your business to a potential client / customer, that person needs to know what difference you will make to their life.
Once you have broken the ice, it’s time to find out more about your potential client’s needs. What issues do they have in their working life that you can help them with? Perhaps they have set up some social media accounts but have little knowledge and even less time to manage them. This lack of time and knowledge is causing them stress and they are not getting to bed until late each evening. The knock on effect of this is that they are tired all of the time. So, we now know the problem.
What about the solution?
I’m not talking Thunderbirds, but it’s a case of F.A.B. – Feature, Action, Benefits! So, Jo the cake maker is exhausted and is struggling with her social media. That’s great, because you do social media management. By telling Jo this, are you selling it to her? No, you’re just telling her what you do, you’re not giving her a reason to buy from you. It works like this;difference you will make to their life. By listening to the person and asking the right questions, you will find out all you need to know.
Feature: You do social media management.
Action: You take over the management of Jo’s social media accounts.
Benefit: Jo has more time to spend on her cake business, doing what she enjoys and does best. The stress of worrying about her social media accounts has gone. So when Jo finishes work this evening, she feels happy and less stressed. Because Jo is less stressed, she is in a better mood. Because Jo is in a better mood, she feels able to relax and enjoy her evening at home. Because of this, Jo picks up the book she’s been meaning to read for ages but couldn’t get started as she was so stressed /tired. Jo sleeps better tonight and goes to work refreshed tomorrow. Because Jo is feeling refreshed at work, she makes a really good impression on a potential customer and gets a big contract to supply them with cakes. Because you are managing her social media accounts, Jo is beginning to get more enquiries – you are bringing her more business too.
Result: Jo taking your services has resulted in improvements to both her quality of life and her sales!
Think of the services you provide to your customers /clients as creating a chain reaction of events. Use these events to your advantage by using them – the BENEFITS – to sell your services.
It’s obvious to us how great our services are, but that’s because they are our services! The skill is being able to translate this in a way that demonstrates the benefits to potential clients / customers. Try taking one of your services and thinking about who would use it and why they would need to use it. Then think about the effects that would have on their working and personal life. Use those benefits to sell it to them.
After all, you would be doing your client an injustice by not showing them how you can help them!
I’d love to hear your experiences of this and if you’ve used this technique before – let me know your thoughts 🙂
After a very successful year which saw us achieve Finalist in both “Best Business to Business 2014” and “Best New Business 2014” at the Darlington Business Awards 2014, it’s time for a short break. We would like to wish all clients, suppliers and business associates a wonderful New Year. Business as usual Monday 5th January 2015 – Happy Holidays!
I read an article recently which discussed the term “mumpreneur”. I have to get it out there – I really don’t like it. It seems to be the new “it” term for describing a woman who has kids and also has her own business. Yes, I have two kids, a dog and a mortgage. So do a lot of other people in the world. It isn’t gender specific.
Don’t get me wrong, I’m immensely proud of my children but the fact I’m a mother doesn’t define me or my business. I love numbers. I felt like that before I had children. Being able to fit my working week around other things such as sports day – that’s a bonus that I allow myself because I choose to. I have a friend who runs a business which she works around her commitment to going to the gym – that’s her thing. Do I think having children has made me better at what I do? Oh yes. That’s life experience though, and we all have that in different ways and to varying degrees.
So apparently two thirds of mothers with children under 10 are entertaining the idea of going into business in the new few years (see link below). I would imagine that the same amount of dads would entertain the idea too – were they asked? Running your own business is really hard work. The hours you put in never equal the amount of “billable hours” and every day taken off is done so with extreme guilt. This feeling isn’t limited to mums in business, it’s experienced by anyone who has a business. The business itself is your “baby” – you want it to grow up healthily, with ambition and vision.
I don’t think I feel degraded by the term mumpreneur, but I just shudder at the need to use the word “mum” in anything to do with work. My son came out with a corker the other day – “Mum, did you know, girls are nurses and boys are doctors?” I almost choked on my coffee! That notion he has picked up, wherever he heard it, proves that these pre-conceived ideas of people and their roles in life are still out there. The thing is, I wouldn’t use the word “entrepreneur” to describe myself either – I’m a person with a business, I don’t feel I need a label to get through the day! I have work relationships with people who have children, male and female – being a parent doesn’t define how they run their businesses – they do. I haven’t seen any of my male business owner friends suddenly calling themselves “dadpreneurs”.
We are what we are – business owners. We all bring to the table what we have that makes us, and our businesses, unique. My business isn’t about being a mum, nor do I work primarily with mums so, for me, the term “mum” is irrelevant. I’m a firm believer in each to their own, so if the term “mumpreneur” empowers someone and that label gives them confidence then that’s great, but it’s not for me.
If I was asked to describe myself I’d use the word “Caroline”. Life is a balancing act – we are all balancing different things. I’m a business owner, a mother, a business partner and lots of other things in between. Mostly though, I’m Caroline. Discuss!
This blog is my response to this article
Caroline Hinde is regulated by AAT. AAT is recognised by HM Treasury to supervise compliance with the Money Laundering Regulations and Caroline Hinde Accountancy is supervised by AAT in this respect.
Address & Telephone
Business Central, 2 Union Square, Darlington, DL1 1GL.