Frequently asked questions

I know that navigating business finances can feel overwhelming, especially with new legislation and the shift to digital systems. My aim is to simplify things and offer the practical support you need. Here are some of the most common questions small business owners ask me, along with our straightforward answers.

What is 'Qualifying Income' when it comes to Make Tax Digital (MTD)?

Qualifying income is the gross turnover your business generates before any costs or tax are taken out.

What's the main thing that makes my accounting support stand out and particularly helpful for small businesses?

My support is friendly, uncomplicated, and I never use jargon. I believe in being informal and personable, making finances easier to understand and manage for you.

How do I move everything from pen and paper to a software system? 

I will sit with you and work through the various easy to use cloud based systems in which to migrate all your paperwork

What are business expense categories?

Do not put everything in Sundries, each expense that occurs regularly needs its own category which makes easier filing when it comes to MTD.

What is the difference between running your business finance on an accrual or cash basis?

Accrual basis = record it when it happens.

You record income when you earn it and expenses when you incur them, even if the money hasn't actually changed hands yet.

Cash basis = record it when the money moves.

You record income when you actually receive the money and expenses when you actually pay them.

Under traditional (accrual) accounting, the cost of a capital asset is generally treated differently from an ordinary day-to-day expense. Instead of deducting the whole cost immediately, tax relief may be obtained through capital allowances, depending on the type of asset and the applicable rules.

Under the cash basis, qualifying capital expenditure on equipment is generally deducted in the tax year in which the business actually pays for it. This means the timing of the tax deduction is linked to when the cash is paid rather than being spread over the asset's useful economic life.

 

If you're a small business owner, what would you expect from the first step?

The easiest way to get started is with an initial email or phone call. If needed, I can arrange a meet-up to get a true understanding of how your business operates and tailor my support to your needs.

What are some common worries small business owners have about their accounts?

Common worries include changing tax rules, and simply not having enough time for day-to-day bookkeeping. I provide clear guidance, support with software, and take the pressure of bookkeeping off your shoulders.

What is a taxable supply when it comes to Value Added Tax?

Value Added Tax (VAT) is subject to 5 basic tests:

1. Is there a supply?
There must be a supply of goods or services.

2. Is there consideration?
Generally, the business receives payment or other consideration in return for the supply.

3. Is it made in the course or furtherance of a business?
It must be a business activity rather than a purely private transaction.

4. Is the supply made in the UK?
UK VAT generally applies where the place of supply rules determine that the supply takes place in the UK. 

5. Is it excluded from VAT or exempt?
Even if the above conditions are met, some supplies are exempt from VAT, while others are outside the scope of UK VAT.

If the supply passes these tests, it is generally a taxable supply.

Ready for clarity?

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