I don’t mean winning at all costs!  I mean that in every business situation, and in every deal you do, you try your very best to make sure that everybody involved wins something of value.

If you are of the ilk that likes to extract maximum money from people as soon as possible and have no thought of future trades, then this idea will be abhorrent to you.

However, if you are building a long-term sustainable business, then taking a little time to ensure that everyone involved in a transaction wins something will give you an enviable reputation of being “the” one to deal with.

In practical terms it means that if someone buys bookkeeping services from us, I veiw that as a compliment.  I will then make sure that this client, and every client, receives a stunning service and that we add real value to their business.

We win because:-

• We take on a new client and boost our own income.
• We have another potential source of referrals and testimonials for marketing purposes.
• We keep our bookkeepers happy doing the work they enjoy the most!

The client wins because:-

• They no longer struggle with their own bookkeeping.
• No more VAT returns.
• No more payroll and all it’s hassles.
• No more deadlines.
• No more sleepless nights.
• Accurate and regular reports about their business.
• The ability to ask questions at any time without incurring any extra fees.

The balance is always tilted in favour of the client for a soundly based, long term relationship.

We have all seen businesses that are out to rip the public off, and then disappear into the ether generally owing lots of money and leaving loads of unhappy customers in their wake.  They are sadly quite successful in the short term and can amass many thousands of £’s for their owners before they disappear.

However, a sustainable business will ensure they give substantial value and their customers are happy to pay for that value.  The business will then be around for the next 50 years or more and will be more than strong enough to ride any waves the economy throws at it.

~Ray

Yes, it’s that time of year again. Isn’t it worrying how quickly it comes around each time. I am sure it gets quicker each year!

The 31st October 2008 is the deadline for sending in a paper Self Assessment Return (SAR) and if you want, HMRC will calculate your tax for you - more on that in a minute.

You can submit an electronic SAR right up until 31st January 2009 but if you would like your outstanding tax collecting through your tax code, you need to submit the SAR before 31st December 2008.

Not everyone who is liable to submit an SAR uses a bookkeeper or accountant, in fact less than 50% do. This means there are a significant number of small business owners who do everything themselves, no doubt in a misguided attempt to save money on fees, and who are at serious risk of a full and lengthy tax investigation into their business and private affairs.

The Tax Office love dealing with “undefended” taxpayers because they are much more likely to have a “successful” (more expensive for the taxpayer) outcome than someone who has an accountant and professional fee insurance in their corner.

Back to the option to have HMRC calculate your tax for you if you submit your paper SAR before the end of October 2008. Why would you???

They will not give the same care and attention to your business records and particular circumstances that an accountant would. You are likely to deal with a low level assistant and just be one of their 100 odd tasks a day. They simply do not have the time or professional knowledge to do everything in their power to minimise your tax bill. They will not understand you or how you run your business and you will pay much more tax than you should.

And, you are no less likely to have a full in-depth investigation because HMRC have done it for you (despite some pub talk I have heard). In fact, you are more likely to have problems because someone higher up has to check the work of the afforementioned low grade assistants who do this for you.

The moral is - use an accountant. I don’t understand plumbing and twice this week I have had near disasters because I thought I could cope and not wait around for the busy expert. Everyone has their field of expertise, but if you want an accountant to come round and fix your blocked toilet then call me, you will get a much more professional, insured and trustworthy job done if you call a qualified plumber but I will be cheaper!

Dealing with the Tax Office at the moment is best left to the professionals. The only consequence of me doing my own plumbing was s### all over the bathroom floor. The consequence of dealing with the might of the Tax Office on your own could be a heck of a lot messier and cost you a fortune.

If you would like to talk about your Self Assessment form, if you are not sure if you should still deal with it yourself, if your present accountant isn’t giving you the time and attention you need - please call me on 0800 047 0731 for a no-obligation chat.

I never charge for the first 30 minute interview and sometimes this is all it takes to put someone’s mind at ease. But if you would like us to take over your case, we will bring all our expertise to bear on your situation until it is resolved.

I never let a tax return out the office without personally going through it, and the supporting information, to ensure nothing slips through un-noticed.

Remember though, if you choose to become a client, you will be expected to either join the Federation of Small Business, or let me see that you are covered for professional fees for a tax/vat investigation. This helps us maintain the highest reputation with the Tax Office and ensures you have the best possible team behind you if an investigation does start.

So, ring me today on 0800 047 0731 and let’s have that 30 minute free chat.

~Ray

There have been a few questions recently about certain types of expenditure and whether or not they are tax deductible so I thought I would put them publicly here in case anyone else was also wondering.

As a rule of thumb, an expense has to be something directly incurred in the running of your business.  You need to be able to prove that you spent the money wholly, exclusively and necessarily in connection with the business.

A few examples of acceptable expenses are, goods for resale, marketing, vans, wages, business telephone bills, business premises rent, rates, light/heat, repairs and insurance, business insurance, business bank account charges and interest, professional fees and subscriptions etc.

A few examples of expenses that are strictly not deductible are any private expenditure such as personal drawings, prescriptions, weekly food shop, private school fees, nursing home payments for Mum, lottery tickets, gambling losses etc.

There are lots of expenses though that if there is some business use of private things a proportion can correctly be claimed against tax.  For example, home telephone, mobile phone, gas/electricity if you work at home, clothing, laundry, computers and equipment, software, use of private car, mortgage interest if you raised money for your business etc.  You need to keep really clear records of these expenses and be able to justify why you feel that the proportion you claim is actually business use, and your explanation can withstand sceptical scrutiny by HMRC’s finest.

Lastly, there are some weird expenses that the tax office select for special treatment.  The main one is entertainment.  If you invite an overseas buyer over to seal a deal, any expenses connected with that are deductible.  However, if you take a supplier out for a meal to get a cheaper price (for example), although the business may benefit, the expense is not allowable.  The same applies if you are trying to woo a new customer from the UK, nothing you spend on entertaining them is tax deductible.   If you are on a business trip yourself, you can claim all reasonable expenses whilst you are away including food and drinks, hotels, travel etc.  But if you are just out of the office for a few hours, you cannot claim any food as subsistence as you would have to have eaten anyway.

There are also expenses approved by the actors union Equity which relate to members and include things that other business couldn’t claim such as hair do’s, stage clothing and makeup etc.  But only people in the performing trades can use these variations in the normal rules.  TV presenters, DJ’s, actors are all examples of people in the arts and media that this applies to.

This was never meant to be an exhaustive list and there are a myriad of other expenses that people incur which their accountant will take a view on - just ask.  If you would like to contact me for any specific advice on what is or what isn’t allowed, please ring, email, text, write and ask - all details are on the contact page.

~Ray

This is a question that I, as an accountant, find incredible when I am occasionally asked.  Why would any busy business owner think there would be a need for more than one set of records?  There is barely time to keep one set, let alone more.  The only time I have found two serious sets of books was when fraud was involved and a grim determination by the businessman to pay as little tax as possible.  No, he didn’t escape prison - 2 years in fact.

Sometimes the question is born out of a huge distrust of computers and computer based bookkeeping packages.  There is more than a little reluctance to rely on the machine - just in case it breaks down, or accidentally wipes all data off it’s hard drive - so should we keep a hand written set of books “just in case?”  The answer is no.  Just make sure you have a disaster recovery procedure - and check your backups regularly just in case they cannot be restored when you really need them.

Sometimes the question is genuine as the questioner heard somewhere, usually the pub, that as VAT on some expenses cannot be reclaimed, that these need keeping in a different set of books.  Likewise, entertaining and other expenses which are not tax deductible should be kept separately from other expenditure which is tax deductible.  The answer again is no.  One set of records is all that is needed and let your accountant worry about what is tax allowable and what isn’t when he prepares your annual accounts.

I advise anyone who asks this question to focus on keeping the most up to date, detailed books they can - just the one set! - or let someone like me deal with it for them for a monthly fee.

Please do not hesitate to contact me if you would like to know more about our bookkeeping bureau service.

~Ray

This is a question that rears its head from time to time here in the office.  My initial reaction is “Why not?”.

Occasionally there is a reasonable reason for the lack of evidence of someone’s business activities.  It may be that the business has grown really quickly and they haven’t been able to keep up.  They may have only just started the business and don’t know the first thing about bookkeeping and are seeking help.  Sometimes there has been a known disaster such as a major flood or a fire.  However, sometimes a person thinks they are being clever in deliberately not keeping records so they pay little or no tax.

My reaction to this question will completely depend upon the circumstances as to why a business owner has no records.  If it is genuine, I will move heaven and earth to help them reconstruct whatever is missing or destroyed and will then stand with them, side by side during a tax investigation, if necessary, to explain what and how we have done the reconstruction.

I will never act for a client who chooses not to keep adequate records of their business activities.  I deal with HM Revenue & Customs all the time and I will never put my professional reputation on the line for any shady character.  Unfortunately, there are accountants who will deal with these people and if they get away with it for a few years before HMRC catch up with them they broadcast their cleverness all around the area.  This can make genuine, honest people doubt that what they are doing is right if this character gets away with it.  The flip side is that they are always found out.  It may take 1 year or 20 years, but they will be called to account eventually.  With all the resources of HMRC and the bounty offered to anyone who shops these characters, they never get away with it.

Ignorance of the law has never been an excuse for lack of records.  Anyone in business knows they may have to pay tax and should inform the authorities when they start their business.  These days there is an unprecedented level of help, information, advice, packages, coaches, accountants, bookkeepers, marketers and consultants both paid and free for the new and established business owner alike.

So… if in doubt about any aspect of business or the requirement for keeping records - ask!!

~Ray

This question comes up a lot here at the office.  I am asked at least 3 times a week as there seems to be lots of confusion out there in the “real world” amongst business people.

The answer is it depends…

If you just complete a Self Assessment Return each year as a consequence of having a company car or other employment benefits, then you should keep your paperwork relating to your claims and expenses for 2 years.  The reason for this is that HMRC have a full year after the filing deadline to open an enquiry into your affairs.  So for the tax year just ended on 5th April 2008, you need to keep this paperwork until at least April 2010.

However, if you are a business owner, the records need to be kept for at least 6 years but preferably longer.  If your accounts year end is 30th June for example, your 2008 Self Assessment will include your accounts information for the year ended 30th June 2007.  So paperwork for that year runs from the 1st July 2006 onwards.  You should realistically therefore keep those records until at least April 2015.

I personally recommend people keep as many years as possible because you just never know when they may be useful.  I know we are told from all quarters that Identity Fraud is rife and can only be prevented by shredding everything the minute you receive it, but a lack of important records during a full tax Investigation can make defence against HMRC proposed additions very difficult indeed.

If you are thinking of disposing of business records, I would strongly recommend you take advantage of micro-fiche techniques as much as possible, or keeping endless backups of your paperless office (as I do) so that all possible information is stored in a way you can get to it.  Then you can shred with confidence knowing you can still answer probing questions easily.  Most modern micro-fiche services and paperless office systems allow searching of documents so tracking things down is simplicity itself.

I hope this clears up a little confusion about business records but please do not hesitate to contact me if you have any questions, or would like any more information.

~Ray

Yes it’s true - it is that time of year again. The family are dragging me kicking and screaming down to the south coast and beyond for the Stewart family annual holiday.

The dog and cat are safely in the kennels, the fish are nice and clean with a food block about to be launched in the morning when we leave - and a post I was writing shall remain here - half finished until the week after next. The post is a really interesting one about who, if anyone, still keeps bookkeeping records manually in the 21st Century - you may think none - but you will probably be surprised when I relate my recent experiences.

Anyway, I am getting a very dirty look from my other half - so have a fantastic week and I will finish the manual records post on the 21st July - all being well!!

~Ray