Known as ‘appointing a paid agent’, it basically means delegating to a professional who will then liaise directly with HMRC about your finance and tax-related matters.

Who can be an agent for me?

Paid agents can be tax advisors, solicitors, or accountants, but you can authorise almost anybody to act on your behalf when it comes to dealing with HMRC, including family members and friends.

This type of agent is known as a ‘trusted helper’.

Although you have a number of options when it comes to who you can appoint as your agent to deal with HMRC, there are advantages to selecting your accountant for the role.

What can my accountant do as an HMRC agent?

An appointed agent can act on the taxpayer’s behalf for different types of tax, such as Corporation Tax, VAT, PAYE and Self Assessment – you might even have different agents for each one.

Simplifying processes and communication

Communication with HMRC can involve anything from queries and requests for information, to payment notices and deadline reminders. Appointing your accountant as your agent means the majority of this correspondence can be filtered through them.

This can make life a lot easier, leaving your agent to relay information to you as needed (and translated into plain terms, rather than scary-sounding HMRC speak).

Audit representation

If HMRC decide to audit your accounts or launch an inspection, your accountant will be able to make sure everything is in order, and talk you through what’s happening. An HMRC audit can be a daunting prospect, so having a professional in your corner can be a valuable source of confidence and support.

Compliance and strategy

As well as helping you stay on top of all your deadlines, your accountant will make sure you remain fully compliant with HMRC at all times.

They’ll also be able to help you optimise your tax efficiency, improve your financial reporting systems and save costs in line with all of the necessary rules and regulations.

Save yourself some time

As well as the tools of the trade that an accountant can bring to the table as your paid agent, there is also the overall benefit of significant time-saving – gold dust for business owners, right?

Having a professional at the helm of any back-and-forth with HMRC means you can focus on other things, like growing your empire. It also reduces the risk of any errors or confusion along the way, which, again, buys you back invaluable time and fends off financial penalties.

Keep stress to a minimum

All the above benefits combined make for a far less stressful relationship with your taxes and HMRC. Entrusting your accountant takes the pressure off you in exchange for peace of mind that your tax affairs are being dealt with by those who know what they’re doing.

How to appoint an accountant as an agent

The first thing to do is check your accountant meet HMRC’s standards for agents.

If you’re satisfied these standards are met, the next thing you need to do is provide your chosen agent with permission by appointing them through one of HMRC’s official authorisation processes.

Your agent will be able to guide you through whichever method is best for you.

Authorising your agent with a 64-8 paper form

A 64-8 form can be used to authorise an agent to deal with Self Assessment, partnerships, trusts, tax credits and people being paid via the PAYE system. It’s also used for VAT and for Corporation Tax.

You and your accountant can work together to make sure all the necessary fields are filled in before you send it back to HMRC to process.

Authorise access to your accounts online

Your accountant can apply for access to your tax accounts through their own HMRC Agent account.

This process will generate an agent code for each tax type they’re dealing with for you, which will be sent to your registered business address. Share these codes with your accountant so they can complete the authorisation on their end and start acting on your behalf.

Grant access through your tax account

If you’d prefer to grant your accountant access to act as your paid agent yourself, you can do this through your business tax account by signing in using your Government Gateway or One Login.

Note: You will need to be set up and registered for HMRC Online Services for this method of agent authorisation.

A ‘digital handshake’

This is where your agent sends a link for you to click that will digitally authorise them to deal with HMRC on your behalf.

What happens after I appoint an agent?

Once somebody, such as an accountant, has been appointed as an agent ready to act on your behalf, you can arrange for them to receive most of your correspondence with HMRC. There are a few exceptions to this, including your tax bills and any refunds you’re eligible for.

Removing an agent’s access

If you no longer wish for somebody to have access to your accounts or act on your behalf as an agent, there are two ways you can undo this:

• Go to your HMRC business tax account (if you have access to this) and remove or swap the agent
• Contact HMRC over the phone or via post, and they will be able to guide you through the agent removal or replacement process from there

Your responsibilities as a taxpayer

Appointing a representative agent is useful but you (the taxpayer) are still ultimately responsible for reporting and paying your own taxes.

That’s why it’s so critically important to have a communicative relationship with your trusted agent(s) and provide them with honest, detailed, and up-to-date information.

It’s also essential to review all documents and tax returns that are shared with HMRC on your behalf to ensure that your records are accurate and compliant. If they aren’t, you’ll be the one dealing with the repercussions, such as financial penalties, not your agent!

 
Looking for more business support? Head over to our info hub for the latest news and handy resources.

The post Can My Accountant Deal with HMRC for Me? appeared first on The Cheap Accountants.

What types of funding are available?

First things first, though – you’re probably wondering what types of funding are even available to you as the owner of a business. There are all sorts of funding and finance options available to businesses, so choosing something to suit your needs can be quite challenging!

This is important for you to understand, so let’s dive in.

Business bank loans

Around 30% of UK SMEs have a bank loan or overdraft, according to the British Business Bank.

The amount you can borrow varies massively, along with the terms and interest rates. For example, loans can be unsecured, or secured against an asset, affecting what you could be liable for if you struggle to make repayments.

An unsecured loan is less risky for you, but riskier for the lender and so they may need some form of payment guarantee up front. This often involves a guarantor who will step in if you struggle to pay but the application process can be more drawn-out even with that in place. You’ll normally need a very good rating!

A secured loan, on the other hand, can be riskier for you but this often means you’re more likely to be accepted for one. Essentially, you put up an asset as collateral, and forfeit it in the event that you can’t pay back the loan.

Small business grants

There are lots of schemes (both public and private) offering grants to businesses across the UK.

For example, landlords can apply for electric vehicle chargepoint and infrastructure grants which enable them to install electric vehicle chargepoints and supporting infrastructure in rental and leasehold properties.

The main draw of a grant over a loan is that it doesn’t have to be paid back. You’ll normally need to include it on your tax return as a source of income though!

It’s also important to note that grants tend to be location-specific (e.g. London or North West), and you have to meet certain eligibility criteria. For example, some are open to both the public and private sectors, while others are aimed at government-run organisations like local authorities.

For a full list of available government grants, have a browse here.

Crowdfunding

If you’re not familiar with crowdfunding, this is basically where you pitch your business idea on a designated platform (or social media) and ask people to invest in it. You’ll typically end up with a large number of investors, each putting in a fairly small amount (as opposed to the reverse).

You can even offer incentives with different levels of reward depending on the level of funding submitted. This could be as simple as promising access to your product or service, subject to enough money being raised for it to go into development (and this way, you’re not simply relying on the kindness of strangers). Just be aware that it’s another form of income, so crowdfunded income is often still subject to tax!

Investment platforms

With these, anyone can invest in exchange for shares – rather than a single large investor who’s carefully vetted.

As the majority of businesses don’t have shares available for purchase, this is only really an option for companies, and the way it typically works is a company will create a new share class so that these new shareholders receive dividends (usually at a lower rate to other shareholders).

Angel investment

This is where a wealthy benefactor – typically someone at the top of their industry – chooses to invest a sizable amount in your business.

They may want an equally sizable stake in it, but this isn’t necessarily a bad thing as far as you’re concerned; it means their interests will be aligned with yours, as they’ll want a return on their investment. As such, they may choose to share any knowledge they have (as well as relevant contacts).

Venture capital

Unlike angel investors who invest their own money in a business, venture capitalists invest on behalf of venture capital firms.

The money itself can come from a number of sources, including public and private pension funds, corporations, foundations, and wealthy individuals.

It should be noted that venture capitalists are typically looking to invest much larger amounts, often into the millions of pounds, and this means they’re only really interested in businesses with high growth potential in fast-paced areas.

How can my accountant help me secure funding?

The real question is, how can’t they help you? Your accountant will be able to explain all your options to you, based on your own unique situation. They can also assist with things such as loan applications and preparing financial reports that show the information lenders and investors want to see.

These financial reports and forecasts will also help you to figure out what type of funding your business would most benefit from.

Ultimately, as a qualified expert in the field, it’s your accountant’s job to remove the guesswork and make your life easier.

 
Visit our accounting support hub for more help, and to compare fees for accountancy services.

The post Can My Accountant Help with Business Loans and Financing? appeared first on The Cheap Accountants.

Remote meetings with your accountant aren’t just a lifeline to keep business-as-usual ticking over when the proverbial hits the fan. Taking your accounting online can actually benefit your business, and promote a more efficient way of working.

The benefits of working with a remote accountant

You may well find there are still some accountancy firms that prefer, or even insist on, client meetings or other work taking place in person. Moving away from longstanding convention isn’t easy for everybody, and it might take a bit of time for some people to catch up.

If your accountant or accountancy firm falls into that bracket then you’ve got three options:

1. Accept that’s how they feel they work best right now, and carry on regardless
2. Try to establish if remote working is something they’re willing to consider
3. Replace them with another accountant that does offer digital collaboration

If you’ve never worked with an online accountant before, and you’re not sure what to expect, it might be worth doing a spot of research first. We have an article which compares online versus high-street accountants in more detail, but in short, benefits can include:

• Time-efficiency, because you won’t need to spend time travelling for in-person visits
• A digital accountant doesn’t need to be local, so you have more choice
• Costs tend to be cheaper, because online accountants are based on your local high street (and paying the city centre rates that come with it!)

Finding ways to work more effectively and efficiently with your accountant in the long term, such as remote meetings, will also bolster the relationship for the future.

How to make remote meetings with your accountant more productive

As with most things, the success of an online meeting largely comes down to preparing ahead so you can get the most out of your time.

• Send invitations out in good time – not as a last minute request with no warning.
• Include everyone who needs to participate in your invitation. It sounds obvious, but it’s easy to make assumptions that don’t deliver.
• Remember to set up the virtual meeting, and include a link! Google Meet, Microsoft Teams, and Zoom are all popular examples.
• Send any necessary documents well in advance. It gives attendees chance to digest them, so you’ll have more useful engagement.
• Include an agenda of the points that you would like to cover, so everyone has chance to prepare.

Set an agenda and stick to it

Naturally, the conversation will dip in and out of various topics, but we recommend creating an agenda beforehand and using that as a guide.

This is as important for in-person meetings as it is for remote meetings, but when you’re not all sharing the same physical space, additional structure can be super helpful.

When it comes to online meetings, it’s also a good idea to allow some time for niceties and personal chit-chat. It can be more challenging to maintain this dynamic when you aren’t communicating face-to-face.

Make sure everybody leaves with clear action points

Again, this is as valuable for in-person meetings as it is for online meetings. Ensuring everybody leaves with clear action points around next steps is essential for optimal productivity. Confirm them in writing after the meeting, so that everybody has the same information.

Record the meeting for future reference

Consider this the modern version of taking minutes and one of the biggest benefits of having online or telephone meetings with your accountant. When you have a recording of the meeting on file, you can refer back to it if needs be or share it with anybody who wasn’t able to make the original meeting.

This will reduce time spent chasing information post-meeting, so you can share information in a time-savvy and efficient manner.

So, to summarise, to make your remote meetings with your accountant more productive:

• Make sure your meeting invites are accurate and include all of the relevant people and information.
• Set an agenda beforehand and stick to it as closely as possible.
• Make sure anybody who needs to leave with action points is clear about what is expected of them and what the next steps are.
• Record the meeting for future reference – one of the most unsung benefits of online meetings, so take advantage of it.

Right, you’re all set to become a remote meeting pro. By putting all of the advice outlined above into practice, you’ll wonder how you ever managed without online meetings before!

Visit our accounting guides for more information and answers to FAQs, or ask your own accounting question.

The post Can I Have Remote Meetings Online With My Accountant? appeared first on The Cheap Accountants.

The services accountants provide typically span everything from tax management, auditing, and bookkeeping, all the way through to things like business consultancy, payroll, help securing funding, and efficient stock management.

But which of these does your business really need? When there’s a cap on your budget, which accounting services should you be prioritising?

Tax efficiency and compliance

Submitting tax returns can be a real headache for a business. One of the biggest advantages of having a qualified tax accountant as an ally is getting help with staying on top of your taxes. They will make sure everything is recorded correctly in your tax return, and with all the necessary boxes ticked.

Not only that, but your accountant also has the knowledge and experience to help you claim back every expense, and take advantage of any available tax relief. Claiming expenses correctly can make a significant difference to the financial health of your business, so consider these skills a particularly valuable resource.

Meticulous and accurate bookkeeping

Bookkeeping is absolutely critical for businesses. It’s a process which includes creating and maintaining records of all your transactions and expenses, as well as other essential day-to-day tasks, such as:

• Preparing financial statements (such as balance sheets)
• Invoicing (both to clients, and dealing with bills from suppliers)
• Credit control (chasing up those overdue invoices!)

Doing so with accuracy (and ideally in real-time) helps you claim for all of those expenses we were just talking about. It’s also key to maintaining a healthy cash flow, and to helping your business operate efficiently (and therefore making a profit!).

Accountants will also be able to point you in the right direction of the best bookkeeping software and show you the ropes when it comes to cloud-based accounting and Making Tax Digital (MTD).

Dealing with VAT returns

Naturally, this service won’t apply if you aren’t VAT registered but for those who are, keeping records and sending VAT returns are yet another complication to consider.

As with your income tax or company tax returns, it’s important to maintain accurate VAT records – not only to keep HMRC at bay, but to make sure you claim for everything that you’re entitled to.

Getting an accountant to do takes a weight off your shoulders, freeing up valuable time for more exciting projects and ensuring utmost compliance and accuracy.

Payroll services

If you’re an employer you’ll also need to think about payroll, and everything that comes with it. There’s actually a lot more to running payroll than simply sending some money to your employees on payday.

The calculations can be tricky, especially if you need to factor in sick pay, maternity/paternity pay, and so on. There are also PAYE rules (where you deduct tax and National Insurance from your employee, and pay it on to HMRC on their behalf), as well as employer NI contributions, pensions and any extras like bonuses or benefits in kind.

What else can I ask my accountant to do?

An accountant can be your troubleshooter, strategist, and your confidante all rolled into one if you really want them to be. This list is by no means exhaustive, more like the tip of the iceberg, really.

• Creating and/or refining a business plan.
• Sourcing funders, liaising with lenders and loan applications.
• Setting and managing business goals to help you grow and achieve.
• Recruitment, what you can afford, and what you most need.
• Inventory management (and related cost-saving).
• Admin assistance (such as company formation and office address registration – things you can do by yourself but might not want to).

We recommend speaking to your accountant, or shopping around for one, to understand the services they offer, so you can cherry pick the things you can afford – and what you think will add most value to your business.

We also answer some of the most frequently asked questions from people just getting started, or ask one of your own for free!

The post Which Accounting Services Do I Really Need? appeared first on The Cheap Accountants.

The same can be said for bookkeepers and accountants. Whilst both work in the same arena and admittedly, their work can overlap, they each have their own respective set of responsibilities.

We look at what defines each and where they differ to help you understand how each can benefit your business.

What does an accountant do?

The role of an accountant is an extremely analytical one, taking data and business records to produce reports and give insight. They help guide decision-making and provide financial advice to business owners and managers.

This role can be done in house or as an outsourced, external resource.

An accountant will take all the nitty-gritty financial details and pull them together to provide the business with one comprehensive, complete picture. This invaluable insight can then influence and help focus cash flow health, budget management, recruitment, and business development.

As part of their involvement, accountants are also an additional layer (a cushion, if you will) between a business and HM Revenue & Customs, managing deadlines and communications on the business’s behalf.

Typical responsibilities of an accountant include:

• Analysis of accounts and financial records
• Carrying out audits
• Guiding on and/or making financial decisions for the business
• Fulfilling financial records (such as tax returns)
• Providing information to steer business growth
• Generating detailed financial forecasts
• Meeting with clients
• Risk analysis
• Budget advice
• Dealing with insolvency
• Representing clients in front of HMRC

What is a bookkeeper?

Bookkeeping is the process by which a business owner tracks financial transactions, manages income and outgoings, and runs the necessary financial reports and returns.

To ensure this is done professionally and accurately, a business owner might decide to employ a qualified bookkeeper (outsourced or internal) to take ownership of the tasks involved.

Doing so also can also reduce the strain paperwork and admin puts on you personally. A bookkeeper can free up the time of a business owner significantly so that they can concentrate on other areas that will drive growth and development.

A bookkeeper is responsible for dealing with things like:

• Financial data input
• Recording and monitoring transactions
• Creating detailed financial reports
• Reconciliation of data (making sure everything adds up across the board)
• Managing repayments
• Drawing up invoices
• Chasing debtors and late payments
• Fulfilling bills
• Preparing tax returns
• Paying in any cheques that are received
• Maintaining accurate business records
• Managing payroll (in some businesses)

What are the differences between accountants and bookkeepers?

Both roles are rooted in finance management and the two titles are commonly used interchangeably by externals. However, bookkeepers and accountants shouldn’t be considered one and the same.

Bookkeeping is sometimes referred to as a subset of accounting as it provides the informational foundations and sound structure from which an accountant can do their best work. Think of it like a relay race, whereby a bookkeeper will pass the baton on for the remainder of the race.

FYI: an accountant can take on the role of a bookkeeper, but a bookkeeper cannot be considered an accountant until they have received the necessary certification.

Do you need an accountant and bookkeeper?

Taking all of the above information into account, the answer to this question really depends on your personal requirements for the business.

As you will now know from digesting the definitions in this article, an accountant and a bookkeeper bring different things to the table.

So, in an ideal world, with wiggle room in your budget, having both onside is a great position to be in. That said, it isn’t 100% necessary to have a bookkeeper and an accountant – if there is a choice to be made.

Now we’ve cleared that up, you’ve no doubt got a million more tax and business finance-related questions on the tip of your tongue, right?

Well, that’s exactly what our free Ask a Tax Question tool is here for! Put your queries to us and our experts will provide you with the answers.

The post Are Bookkeepers and Accountants the Same Thing? appeared first on The Cheap Accountants.