Ignore the post at your peril!

We all hate to deal with paperwork, especially when it is from the taxman, or maybe from Companies House. It usually means bad news or a bill, so the best thing to do with it is to put it aside in the “I’ll do that later pile”. Of course. we all know what can happen to that pile, it becomes forgotten as we deal with the more important aspects of our businesses.

Sometimes we think we have got away with it, because nothing nasty happens, so it must have been ok to ignore it, mustn’t it. What a relief, what could possibly go wrong?

Let’s look at a possible scenario.

You have an old dormant company that you no longer use, you are busy working on your new business, so you ignore any post relating to the old company, because you don’t need it any more. This must be ok, because nothing nasty has happened, so far. All of the post for this company is going into the “I don’t need to worry about this” pile, this continues for many months.

Then, one day, you get a letter from the bank. You open it thinking it is a statement, but to your horror you read it – it says that they have received notification from Companies House that your old company has been dissolved, therefore the £5000, that you had left in the account for a rainy day, is no longer yours, the account has been closed and the balance transferred to “The Crown”

You ask yourself, “how on earth could this have happened”?

Well, it turns out that some of those letters, from Companies House, that you had ignored, were chasing you for outstanding accounts and annual returns. But, because you hadn’t replied, Companies House have assumed that the company was no longer required, so they have started the process of striking off the company. Some of the “filed” letters would have informed you, but of course you didn’t see them, “what could possibly go wrong”? After a few months, the process is complete, your company is dissolved, the bank are notified and the rest is history.

This “nightmare” scenario is one, which we at BirchCooper Accounting Services will help you to avoid. We specialise in offering a full compliance service, to make you are aware of all the important dates and to make sure you don’t miss them. Of course, we can’t make you open your post, but we have other “ways and means” to make sure you do (with our help), whatever is necessary to negotiate the minefield that is compliance.

Don’t get caught out like this, we all have a myriad of dates and deadlines to remember – let us do it for you.

About the author:

Henry Cooper has been involved with accounting and finance for over 30 years. He is an experienced Non-Executive Director, Board Chairman, owner of a successful High Street Accountancy practice and part-time university lecturer

Henry is passionate about small and micro-business compliance, and has regular motivational speaking engagements, where he talks to potential and current small business owners about the practicalities and pitfalls of starting and growing a business.

He is regularly involved in consultations with HMRC, Companies House and other Government departments and is a Past President and Board Chair of the Association of Accounting Technicians, a global membership body for accounting professionals, with over 130,000 members in over 90 countries.

Contact details:

Telephone: 01280 817799
Email: henry@birchcooper.com
Twitter: @birchcooperh
Linkedin: http://uk.linkedin.com/pub/henry-cooper/15/7a2/860

Did you know………?

1% of taxpayers pay the ADDITIONAL rate of tax
They contribute 29.7% of the income tax revenues to the UK Government

14.7% of taxpayers pay the HIGHER rate of tax
They contribute 36.8% of income tax revenue

81.6% of taxpayers pay the BASIC rate if tax
They contribute 33.2% of income tax revenue

So, is it really THAT bad?

We seem to be bombarded nowadays, with bad news. Job losses, insolvencies, triple-dip recession, austerity, Euro crisis – it seems to go on and on. It’s no wonder then that the country is grinding to a halt, why would anyone even consider going into business, it’s bound to fail isn’t it?

But, are things REALLY that bad, there must be some encouragement, some good news out there, mustn’t there?

If you look at the Companies House statistics, in the year to 28th March 2013, there was a net increase of companies on the register of 192,000 – ok, admittedly, not all of them will become fully fledged businesses, but if only half do, that’s nearly 100,000 potential new employers and contributors to the economy. This doesn’t include sole-traders, partnerships etc., so the numbers are even better. Studies have shown that over the past three years, the private sector has created over a million new jobs, life is returning to the housing market and parts of industry, such as motor manufacturing and its associated suppliers, are flourishing.

And what else?

We have interest rates at record low-levels.

We have new methods of FREE interaction with our customers (and suppliers), via social media, where we can give and receive honest feedback about our services given and received.

We have a wealth of FREE information on the Internet, where we can carry out research about our competitors, legislation and so much more. ALL of this information is now at our fingertips, with mobile devices, so we can always be “in the know”.

We also have amazing technology nowadays, which allow us to automate tasks, increase our productivity and just generally get things done.

So, why is it that this is not being talked about more? Why is it that according to recent research, it is estimated that UK business is currently sitting on balance sheets with cash of an estimated £700 billion?

I guess this is the negative drawback of some of the good things above. TV news, social media and the Internet, seems to only like to give us bad news, which over time, we end up believing is the ONLY news. So, until this, or our beliefs change, perhaps we won’t allow things to get better.

I think this is a shame, because as we have seen above, it’s not all bad. Maybe, I am seeing some of this through some rose tinted spectacles, but as I can see with my business and the businesses that we help and work with, it’s not all bad. With every loser there will always continue to be winners as well.

I wonder what would happen if the Government made “bad news” illegal for a year and that news channels etc. could only give good news for that time, would it make a difference? Who knows, but me, I’m going to keep wearing my groovy rose-tinted specs, and keep searching for those positives, they ARE there, you just have to look in the right place. Go on – give it a try!

And if you are encouraged by this, maybe you are needing further encouragement to start up a business or want help with an existing business, come and talk to me and you will see my passion for the small and micro-business community, hopefully, i can share some with you.

328 sleeps to Christmas!

According to my IPad app (other devices are available!), today (31st January 2013) there are just 328 sleeps until Christmas, which I guess means there should be 365 sleeps until this day in 2014.  So, why should I care about that then, I hear you ask?

Well, yesterday (30th January – 1 day early), we submitted our final tax return to HMRC to continue our 100% record to meet the annual 31st January HMRC tax return deadline.  I want to say a big thank you to our clients for working with us to achieve the deadline.

It always interests me, how our clients, some of who, have been with us for many years, always follow the same patterns.  We get the keen ones, who bring in the information as soon as possible after 6th April, so that they can be in the smug satisfaction of knowing that all is taken care of, for another year, well in advance and then we get the others who like to leave it until the last moment, so that they can enjoy the thrill of the chase, as we rush to complete everything in time, and of course all of the others in between.

Now, I have to say, that I do quite enjoy the final push to the deadline, it’s very satisfying watching the percentage of completed tax returns increasing as we get nearer to the date, coupled with the worry of “can we do it?”, it can become quite a buzz!

So, why have I decided to start chasing our clients much earlier for their information this year, am I looking to have a holiday in January or something (not sure about Wales in January!), or is there some more sinister reason?

Well, lets look at the benefits of getting your tax return done early:

  • the smugness of being able to relax in the satisfaction of knowing that “tax doesn’t have to be taxing” and you are all compliant for another year, so can relax, one less worry
  • by getting your tax return done early, we can calculate any liability and give you much more warning of what you will have to pay the following January, which can lesssen the shock, which sometimes occurs, when you have had a particularly good year
  • similarly, if we calculate that you are due a tax refund (particulalrly might apply to CIS sub-contractors), you will have the refund much earlier
  • it will, avoid you getting lots of e-mails and phone calls from us, chasing you, for your information – it will get us off your back for another year!
  • perhaps I could have that long-awaited holiday in Wales in January!

So – how soon COULD you get your information in to us:

  • if you are self-employed, with no PAYE income as well, as soon as possible after your year end date
  • If you are on PAYE, either 31st May, if you receive no benefits, or end July if you do (these are the deadlines for your employer to give you your P60/P11d)

So, in reality then, bearing in mind the latest date above is 31st July, if we could have all of the information in by then, why dont we say that providing we do, we’ll get all of our clients tax returns done by 31st October and we can all relax once the clocks go back, safe in the knowledge, that we are all compliant, knowing exactly what our liabilities are.

Which means, I can finally have that 2 week holiday in Wales in January, my family will be so pleased!

So, will this happen?  Who knows, we’ll see what happens.  If you are worried, check back next year to see how we did and, in the meantime, can I be the first to wish you a Happy Christmas 2013, safe in the knowledge that you won’t be worrying about that pesky tax return.




Don’t let this happen to you!

I was recently visited by a potential client, who had enquired about the possibility of using our services.  We had the usual discussion about the type of business, what was needed and the current situation.

The first alarm bell rang when they told me that they had been disengaged by their previous advisor, due to non payment of fees, but then things got a whole lot worse!

There were issues with VAT registration, PAYE registration, P11D issues, current accounts being overdue by nearly six months, previous accounts submitted late and outstanding tax returns, amongst many other things.  The potential for penalties and interest were becoming very large at this stage.

This got me thinking, how on earth does one get into this mess?  I might argue that a previous accountant might shoulder part of the blame, for not picking up the lack of VAT registration, due to the amount of turnover, but I only had the potential clients word for that!  And, why did he leave it so long to try to get it sorted?

So – how can you avoid this happening to you?

  • Engage an accountant that has been recommended to you BEFORE you start out in business.
  • Discuss with the accountant ALL of the relevant facts relating to your business and your personal tax affairs – make sure they have ALL of the information they require.
  • Make sure you are clear from the outset as to what is required from you and what the accountant will be doing – this is usually done in the form of an engagement letter, if not, make sure you clarify.
  • Make sure you are clear about your VAT, PAYE, corporation tax and personal tax requirements.
  • Make sure you keep accurate and up to date records, from day one.
  • Make sure you keep your accountant notified of ANY correspondence from HMRC, Companies House and any other Government bodies – do this on the same day that you receive it – IGNORE NOTHING!
  • Keep in regular touch with your accountant, if you’re thinking of doing anything with the business, ask your accountant first, just to make sure it won’t affect anything that you are unaware of.
  • Make sure you are aware or made aware of ALL of the deadlines that are applicable to your business (there will be many!), if in doubt either ask for a list or ask your accountant to remind you – BEWARE, there are more and more penalties now for late or incorrect submissions and there will soon be more scope when PAYE Real Time Information and Pensions Auto-Enrolment kicks in!
  • Make sure your accountant is aware if you need something urgently for any reason, so that they can factor this into their workload.  Above all – PLEASE DON’T LEAVE ANYTHING UNTIL THE LAST MINUTE

Don’t forget there is also lots of FREE advice on the web, such as DirectGov, HMRC, Companies House, BIS and many more.  These can’t and shouldn’t  replace the accountants advice, but can help for further understanding or maybe even give you more questions to ask your accountant!

Once you have done all of the above for a while, it will become second nature – you will have a much less cluttered mind, fewer worries and will be able to concentrate on what you do best – running your business, let your advisors do the rest.  And finally don’t forget to consider what other advisors you might need – Legal, HR etc.

You know where we are when you need us!