Accounting

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 VAT codes
*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]
Why have an Accountant?
*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]
Simple Bookkeeping
*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]
Choosing Your Accountant
* 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]

New VAT Rate 24/11/2008 New VAT Rate Posted by Happy Accountant at 12:00 pm No Responses Accounting, Bookkeeping, VAT From Monday 1 December 2008, the VAT rate will drop to 15% and remain at this level until 31 December 2009, when it will revert back to 17.5% The new VAT fraction is 3/23. Full Article	Net Book Value 08/05/2008 Net Book Value Posted by Happy Accountant at 9:00 am No Responses Accounting *Also, called the “carrying value”, the net book value is the value of an asset in the accounts at any given point, calculated by: original value less accumulated depreciation OR previous year’s value less current year’s depreciation. (Ignoring, for the time being, revaluations and so on) In yesterday’s examples, the net book values would be [read more] Full Article
Calculating Depreciation 07/05/2008 Calculating Depreciation Posted by Happy Accountant at 9:00 am No Responses Accounting *There are several ways of calculating depreciation. Two of the most popular are: Straight line method If an asset is bought for £10,000 and it’s useful life is estimated at 10 years (with no residual value at the end of the ten years), then the annual depreciation charge is £10,000 ÷ 10 = £1,000 per [read more] Full Article	What is Depreciation 06/05/2008 What is Depreciation Posted by Happy Accountant at 9:00 am No Responses Accounting Depreciation is the decrease in value of an asset. It reflects the use of the asset and the passage of time. It spreads the cost of the asset across the years (or more correctly, accounting periods) of it’s useful life. Full Article
What is Capital Expenditure 05/05/2008 What is Capital Expenditure Posted by Happy Accountant at 9:00 am No Responses Accounting Capital expenditure is quite simply expenditure on buying or improving an asset (whether that asset be a physical one or not which “provides future benefits” over more than one accounting period). It is commonly abbreviated to Capex. Full Article	Payroll record keeping 06/03/2008 Payroll record keeping Posted by Happy Accountant at 9:00 am No Responses Accounting, Bookkeeping, PAYE&NIC *Once a payroll is in operation, HMRC lay down certain requirements as to what records and information needs to be kept. These include: employees names, addresses (and their dates of birth) gross pay, NICs, PAYE, other deductions, net pay (keeping a copy of their payslip would normally satisfy this requirement, assuming the payslip contained all [read more] Full Article
Payroll Basics 05/03/2008 Payroll Basics Posted by Happy Accountant at 9:00 am No Responses Accounting, Bookkeeping, Tax *Logically, the basics of payroll are straightforward but unfortunately, there are various rules and thresholds which can make actually operating a payroll less so. In calculating an employee’s pay, normally, you begin with their gross pay and then work out the deductions. After taking away all the deductions, the net pay figure is what is left owing [read more] Full Article