Benefits in kind are items or services that you or your employees receive from your company in addition to your salary. 

 

They can include things like private healthcare, interest-free loans and company cars. They are reported to HM Revenue and Customs (HMRC) using the P11D form. 

Research by Argos for Business says that errors in managing petty cash could be costing small businesses in the UK an average of £355 a year. With over five million businesses across the country that could amount to almost £1.8billion. 

 

Lost receipts and complicated processes are the biggest problems. More than one in 10 (15%) of those surveyed said that they didn’t know how their employers keep track of petty cash. 

 

Petty cash is often used for the wrong things too. For example, the research showed that some businesses used petty cash to buy assets – even a used ice cream van in one example. Petty cash should only be used for small, occasional costs such as refreshments or parking fees. 

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. 

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.