*A journal is used to record any double entries that do not arise from anywhere else (such as sales, purchases, payroll). The format of a journal is usually: Date Folio Debit £ Credit £ Account to be debited X Account to be credited X *
Choosing Bookkeeping/Accounts Software
* Choosing bookkeeping or accounting software for your business or organisation is a big step. There is so much available on the market, with new vendors and products coming out all the time. So, how do you decide which is the best for you? How much you are prepared to pay? There is such range of [read more]
The Consequences of Being Inside IR35
*The financial consequences of being inside IR35 are mainly (there are other consequences) you lose the tax-avoidance facility of dividends. Essentially, if you are within IR35, you must calculate a “deemed payment” and pay NICs and PAYE (tax) on that deemed payment. The tax-deductible amounts that you can claim in travel and expenses will also [read more]
When to Register as an Employer
*As soon as you take anyone on where any of the following conditions apply, you need to register with HMRC as an employee. the employee already has another job the employee receives a pension (state or occupational) the employee will earn at or over the PAYE (tax) threshold the employee will earn at or over [read more]
*Sage uses the following codes for VAT: T0 – zero rate VAT T1 – standard rate VAT T2 – exempt (eg. stamps, insurance, aire fares, bank charges, financial services T4 – EC Sales T5 – lower rate VAT (eg. electricity, gas, women’s sanitary products) T9 – not involving VAT/outside scope of VAT (eg. suppliers that [read more]
Registering for VAT and Keeping VAT records
*You must register for VAT with HMRC. This can be done using a paper form or online. Once registered, you generally have to keep reocrds of: the VAT you charge on your sales (output VAT) the VAT you have paid on your purchases (input VAT) the total amount of sales excluding VAT the total amount [read more]
Using Excel for Accounts and Bookkeeping
*The great thing about MS Excel (and others say it’s greatest downfall) is that it is so adaptable and because it normally comes bundled with the PC you bought for your business, it’s cheaper than buying accounting software. For start ups and possibly for the sole trader or small limited company, it’s a very easy way of keeping track [read more]
*Because… Doing the accounts takes you away from your real business An accountant could do the job quicker and more accurately An accountant could save you money in the form of tax-savings as well as sometimes finding other areas for savings and efficiencies. Professionally produced year end accounts will be taken more seriously by banks and [read more]
What is the Difference between Bookkeeping and Accounting?
*The two really overlap: Bookkeeping is part of accounting. It is the recording of the day to day transactions of a business – either in “manual” books, or on computer software or spreadsheets. Therefore, bookkeeping can play an important role in the efficient running of a business: Purchase Ledger – A business needs to pay [read more]
*You need three basic “books” (or ledgers): – a cashbook to record all cash/cheques/bank transfers going in and out of your business – a purchase ledger, to record details of all the purchases that you make – a sales ledger to record details of all the sales that you make (if you are a retail outlet, [read more]
Advantages of a limited company
*Obviously, the main attraction of forming a limited company is the “limited liability” of its owners, the shareholders, as it protects the personal assets of the owners. Should the company fail, the company is liable without limit for its own debts, but its shareholders’ liability is limited to the amount oustanding (if any) on their [read more]
What do you need to set up a company
*Essentially, before you begin, you need: a company name, which can be almost any name that has not previously been registered. a Director a Company Secretary (which cannot be the sole director) (or you could have two directors, one of whom could also act as Company Secretary) a shareholder (which can be either the director [read more]
* Speak to your prospective accountant on the phone first and then, if you are still happy, set up an initial meeting – which should be free of charge. Ensure that they are professionally qualified and are current members of a professional body (Chartered Accountant (ICAEW/ICAS/ICAI), Chartered Management Accountant (CIMA), Chartered Certified Accountant (ACCA) for [read more]
