As the owner of a limited company you can receive tax relief on money you spend running your business. Known as allowable expenses, if you claim them correctly, you can probably increase your take-home pay. 
 
Here are some of the most common expenses you can claim. 
Here Lucie explains how one business owner regained control of his bookkeeping and VAT returns. 
 
It’s easy to lose track of your financial records. In this case, a business owner just hadn’t had time to find a replacement when his previous bookkeeper left. 
 
When he realised that his VAT return was due the next day, he knew he was going to have problems – he hadn’t done any bookkeeping for five months. 
Small business owners should be aware of changes that come into effect from April 2019. The national living wage will increase and so will minimum pension contributions. 
 
Here’s a quick summary of what’s happening. 
Setting up a VAT registered client with Xero & Hubdoc 
 
Over the past few weeks I have set up a new client on Xero as they have registered for VAT and wanted to ensure everything is being done correctly. I have been working with the client to add all their information back to the start of their financial year so they have accurate accounts when it comes to year end and we are reclaiming the VAT for the allowable purchases since they took over. 
We have been using the Hubdoc app to input all the recent invoices and some of the historical ones, this has helped to get them organised about how they will do this going forward. 
Using a bookkeeper ensures clients are aware of all new legislations as they come in to force and assisting with the transition to Making Tax Digital. 
 
There is confusion about Making Tax Digital, what it means for businesses and when and what it is compulsory. 
 
Cloud software companies would love you to believe that you have to have online accounting software, but you don't. if you want to continue using spreadsheets that is fine as long as it is attached to Bridging Software. There are many options out there to have a look at. 
 
That said, some businesses are using this as an opportunity to move to cloud software and streamline their paperwork by going more cloud based. 
 
The first compulsory MTD returns don't start straight away in April. They start from the first VAT quarter that starts after April 2019. 
Making Tax Digital 
Rubbing out 'un' in unqualified
A bookkeeper can give you back valuable time to spend on your business.  
 
How do you decide which bookkeeper to choose? 
Firstly, and most importantly, your bookkeeper should have formal business and accounting qualifications and accreditations. These can include: 
Association of Accounting Technicians (AAT) Diploma 
International Association of Bookkeepers (IAB) Diploma in Bookkeeping - At least levels 1 and 2 from the Association of Chartered Certified Accountants (ACCA) or Chartered Institute of Management Accountants (CIMA). 
Institute of Certified Bookkeepers (ICB) – Level 3 Certification. 
5 reasons why hiring a bookkeeper is beneficial for your business: 
 
1) It is more time efficient as they can do it faster 
2) It is cost effective because companies can spend the time working on their business 
3) It is accurate – they know what you can and can’t claim for 
4) Record keeping is done properly – HMRC can issue fines if they find inaccurate records 
5) VAT is recorded correctly for the VAT return to be accurate again saving the risk of fines. 
 
So who do you know who would benefit from any of these things!? 
 
Whether you are self-employed, a sole trader or running a small limited company, you don’t have to work with a bookkeeper or an accountant. 
 
The important question you need to ask yourself - ‘Is it a good use of my time to do my own accounts, self-assessment tax return and VAT returns?’ 
 
As most small business owners know, our time is precious. We need to decide what we need to prioritise. 
 
When it comes to keeping our accounts up to date, the answer is usually easy. Ask a qualified professional to do it. 
HMRC have now started sending out letters to VAT registered companies about Making Tax Digital for VAT
This means companies will have to have either accounting software or bridging software in place by April 2019 in order to submit their VAT returns. I have been invited by Xero to be part of the Making Tax Digital for VAT pilot, so I can help companies to be prepared for this in advance. 
 
Bookkeeping needs to be done in a timely manner as part of this, and this is where LEO Bookkeeping Services can help. 
 
So... do you know any businesses or sole traders who are unsure about the choice and use of software for Making Tax Digital for VAT? 
 
https://www.xero.com/uk/ 
 
Give us a call at LEO Bookkeeping services and we can take the stress out of bookkeeping for you. 
 
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