Chartered Management Accountants

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FAQ

  • Why should I use an accounting firm?
     

    As a small business owner, working with Small Business Accountants lets you focus on growing your business. With expert support, you can avoid getting caught up in financial details. An accounting firm streamlines the entire process, saving you time and money. This allows you to stay focused on business growth while ensuring everything runs smoothly.

    For individuals managing taxes, an accounting firm simplifies navigating complex financial regulations and tax codes. Instead of handling everything yourself, you can rely on professionals for accurate and efficient tax management. This reduces stress and ensures your finances are in good hands.

  • What's the difference between a bookkeeper and an accountant in the UK?
    The initial step in accounting is bookkeeping, which records all sales and purchases your business makes. Bookkeeping involves organizing financial data, while accounting interprets and presents that data. Accounting provides a subjective analysis of the recorded data to offer insights into your business’s financial health.
  • What are the best ways to separate my business and personal finances?

    For small businesses, mixing business and personal finances is a common issue and a major concern. This makes tax time more stressful and complicates tracking your company’s profitability. Worse, it could lead to an IRS audit and hefty fines. To avoid this, here are the best ways to separate your business and personal finances:

    • Get a business bank account
    • Get a business credit card
    • Use accounting software
    • Pay yourself a salary
    • Separate receipts

    Keeping these two parts of your money life separate is important in order to preserve your sanity and to ensure you have a sustainable business model.

  • How long do I have before I register with HMRC once I start trading?

    You ought to notify HMRC within 3 months to avoid a £100 penalty. Contact us if you are approaching this deadline. We will help you get the form in on time.

  • Should I be prepared in case HMRC want to investigate my accounting records?
    HMRC may inspect your accounting records at any time, so it's important to keep them ready. Recently, the number of investigations has increased as HMRC seeks to recover more income tax receipts. They have the power to examine your accounts going back several years. It’s essential to keep your business accounts and tax records for at least five years, and the more organized they are, the better.
  • How long should I keep my financial records?

    Generally, you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. However, the IRS gives a number of different guidelines for keeping financial information which this information varies depending on whether you are an individual or a business.

    General rules for individuals:

    • Keep bank statements for 1 year
    • Keep loan documents, credit card statements, and other contacts until fulfilled
    • Keep annual investment statements until sold
    • Keep tax records for 7 years from filing date
    • Keep receipts for large purchases, real estate deeds, vehicle titles for as long as you own the property

    General rules for small businesses and entrepreneurs (The rule of thumb is to keep all items for at least 3 years):

    • If you have not yet paid taxes on income that you should report, keep documents for 6 years
    • If you claim a credit or refund after you file a return, keep records for 3 years from the date you filed the return
    • If you file a claim for securities or bad debt deduction, keep records for 7 years
    • Keep all employment records for 4 years from the date that the tax is paid
  • What should I do if I can’t pay the taxes that I owe?

    In case if you can’t pay off the full amount due, you should still file your return. Also you need to pay what you can by the deadline in order to avoid interest and penalties. Contact the IRS to discuss payment options where in some cases, the IRS can offer a short-term extension to pay, a payment installation agreement, or waive your penalties.

  • I made a mistake on my tax return. What should I do?

    Don't panic!

    Now, you need to take action based on the specific mistake you made.

    If you missed information, the IRS will likely contact you directly to request it. Simply provide the missing information correctly.

    If you made a calculation error, the IRS will probably catch it. Their review process is thorough, and many small mistakes will be discovered. You usually won't need to correct minor errors.

    If you forgot to claim a credit or deduction, or if you failed to report income, you'll need to file an amended tax return using a 1040X form. You can find these forms on the IRS website.

    Feel free to contact us if you have any further questions or concerns about a tax return error, or if you need help filing an amended return.

  • How much will your service cost me?

    That depends on the services that you are looking for and on your business. So basically, the costs are determined by the size of your business and your accounting needs. In any case, we can assure you that our service is cost-effective.

  • Do you bill by the hour for your accountancy services?

    No, we don't. We determine fixed fees for our services before starting any work. You can discuss our prices for company accounts and tax returns with us, as we prefer to agree on these fees upfront.

     
     
  • Are you able to take on the whole accounting function of my business?

    Yes, we handle everything, including bookkeeping, payroll, VAT returns, and year-end compliance. Additionally, we offer management accounts and business consultancy based on your needs.

     
  • How do you transfer paperwork and information?

    The transfer process of getting discharge approval from one accountant to another depends on your needs and location. Clearance letters are sent via email and post, but email is the faster and more efficient method.

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