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!