Tag: Question

Q. “Can you deal with HMRC on my behalf?”

A. “One of the many benefits of engaging us to work for you is that we can become your agent with HMRC.

This is straightforward for us to set up and once we’ve been granted agent authorisation, we receive all correspondence relating to your tax affairs (aside from tax bills and refunds, you will receive letters about these matters too).
We can also become your agent for VAT, should this be applicable.

It’s not only accountants who can act as your agent, however, you must ensure that when seeking agent representation that your agent meets HMRC’s ‘standard for agents’ criteria”.

Tax doesn’t need to be taxing, say HMRC. It’s even less taxing when you’ve got an agent in your corner!

Ask the Accountant!

Bit of a silly one this week, but we’ll honour it

“Q. Is it roasted cheese or toasted cheese?

A. Neither, it’s cheese on toast!”

Controversial…or perhaps this was a Gouda question after all? *sorry*

“Q. I’m self employed with low profits, should I pay Class 2 National Insurance (NI)?

A. Whilst it may seem tempting not to pay NI due to your low profits, we would always recommend paying your Class 2 contributions.

If you don’t pay Class 2 contributions, you may end up with gaps in your NI record.

Other reasons as to why you may have gaps in your record include:

– you were employed but had low earnings- you were unemployed and were not claiming benefits

– you were living or working outside the UK

Gaps in your NI record can mean you will not have enough years of National Insurance contributions to either:

– get the full State Pension (sometimes called ‘qualifying years’)

– qualify for some benefits

You can either call HMRC or register with their service online to check your contributions as they stand today.

Alternatively, if you’re a current client, you can contact us to check on your behalf”.

“Q. Can you claim tax relief for working from home if someone in your household already has?

A. Yes – it is an individual benefit. Tax relief is given on the standard claim of £312 per person – but make sure that your employer isn’t already paying you working from home expenses.”

Q. “What is accounting?”

A. “This is an excellent question and we’re surprised we’ve not been asked before now!

According to Business Dictionary, Accounting is ‘…the systematic process of identifying, recording, measuring, classifying, verifying, summarising, interpreting and communicating financial information’. Or in summary, it’s the process or work involved in keeping financial records of a person, business, or organisation.

Accounting allows for the analysis of past financial performance and prediction of future monetary challenges/stability. This is achieved by examining results relating to profits, losses, productivity, sales trends and costs.

Accounting matters, as it documents how well your business or organisation is doing or to prove how much tax you should pay. HMRC, banks, credit lenders and investors will all require this accounting information.

Without accounting, it would be almost impossible for businesses to make short-term, and especially, long-term decisions. Excuse us whilst we don our superhero suits!

Thanks for the question. Come back next Tuesday for the next instalment of Ask the Accountant @ CAAS”

Q. Why do you offer pay-monthly packages?

A. We found that offering pay monthly packages to our clients allows them to split the cost of our fees over the year, instead of paying in full; when they may already owe HMRC money too.

Our clients paying monthly also assists our cashflow, which really helps us as we’re a small business. We’re also signed up to the Scottish Business Pledge, part of which is paying our suppliers in a timely fashion, so having regular income is important.

We do offer one of payment for clients who don’t feel comfortable engaging in a contract, however, these fees will be higher and they also don’t include ongoing support.

The choice is entirely up to you – pay over 12 months and receive regular communication and the chance to ask questions, or, if you’re confident you don’t need us, pay in full and use us again in the future, if required.

Q. Should I set up a business bank account?

A. We’d always advise setting up a bank account that can be solely used for business purposes.

This means that you’ll have a clear record of just what the business has spent, and what it’s received.

It’ll make things so much easier to reconcile on for example, Quickbooks, and nothing will be missed.

Compare banks, as they all charge different fees. Some of them offer promotions when you open a new account with them.

If you’re new to our Accountancy blog; welcome!

We do things a bit differently to other accountants – no one cares about tax updates or financial news until it affects them directly, and especially nobody wants to hear these updates from a second source. So, we try to keep accountancy lighthearted.

With that in mind, please read our feature called ‘Ask the Accountant’.

Every week we post a different question that we’ve had from people throughout the years.

This week it’s a controversial question (perhaps) – who are HMRC?

It’s a good one because they dictate who pays tax, when you pay tax and how much you need to pay.

Let’s dive in, shall we?

To begin HMRC stands for Her Majesty’s Revenue and Customs. HMRC essentially collect money from residents of the United Kingdom. This money pays for public services throughout the UK, and also provides welfare benefits for those who need them.

HMRC is a non-ministerial Department established by the Commissioners for Revenue and Customs Act (CRCA) 2005 – it replaced the Inland Revenue and Custom and Excise. HMRC must report to Parliament via a Treasury Minister.

HMRC are responsible for the following:

– Corporation Tax
– Income Tax
– Inheritance Tax
– Capital Gains Tax
– Environmental taxes climate change and aggregates levy and landfill tax
– Insurance Premium Tax
– Stamp, Land and Petroleum Revenue Taxes
– Value Added Tax (VAT), including import VAT
– Customs duty
– Excise duties
– Trade Statistics
– National Insurance
– Tax Credits
– Child Benefit
– Enforcement of the National Minimum Wage
– Recovery of Student Loan repayments

HMRC State that they have 3 objectives:

1. to collect revenue due and police avoidance and evasion
2. transform tax and payments for our customers
3.design and deliver a professional, efficient and engaged organisation

There is much, much more on the gov.uk website if you want to get even geekier. Or, if you can’t sleep at night…

Be sure to visit back next week for the lowdown on some other burning accounting question!

Q. What is the profit and loss account?

A. The profit and loss account; also known as the P&L or the income statement.

Essentially, it’s an account in the books of an organisation, where incomes and gains are credited, and expenses and losses debited; so as to show the net profit or loss over a given period, normally a quarter or a year.

In short, it’s a financial statement showing a company’s net profit or loss in a given period.

Of course, we always need to caveat that it isn’t as simple as explained above. It’s why we do, what we do!

Get in touch to arrange an appointment.

T: 0141 889 1161 E: info@caas.org.uk

Ask the Accountant!

Q. What is the balance sheet?

A. The balance sheet can be viewed as a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specified period.

It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

The formula to use when calculating the balance sheet is:

Assets = Liabilities + Shareholders’ Equity

Of course, it is more in-depth than the above, which is why it takes a number of years to become a qualified accountant; but we believe things make more sense when you begin to understand what they are or why they require to be done!