EP #6 – Accountancy Advice, Tax Traps, and Staying Compliant

Overview

Accounting & paperwork are big parts of running a business – but that doesn’t mean they should control you. 

This week’s episode is all about what goes on behind the scenes and how to finally enjoy running a business. We invited Jed over to share advice and tips from his decades of experience in the industry. Be sure to tune in if you want to learn how to make tax season as stress-free as possible!

Listen to the episode:

Highlights

Background

• Jed walks through his personal background and how he got into the industry. (1:00)
• What kind of work he focused on, and how he helped his clients. (2:10)

Compliance

• A lot of the compliance work for trades businesses is related to tax returns & HMRC, but for limited companies it’s more to do with the information that needs to be filed to the Companies House. (2:54)
• For the last 15 years limited companies could file abbreviated accounts but it’s now changing this year to full accounts (profit/loss as well as just balance sheet). (3:42)
• The money laundering problem is what’s brought on this change for more regulation and detailed profit/loss reporting. (5:40)
• What kind of impact this will have on limited companies. (7:20)
• In the last 20 years, a lot more regulations have come in – there is a whole new industry focusing on making businesses compliant. (8:38)

Tax & Making Tax Digital

• Is it easier for sole traders and smaller businesses with Making Tax Digital? According to Jed, not quite… (12:24)
• Jed explains what happens if you don’t keep good records, and why your first tax bill is always the worst. (15:36)
• The difference between balancing payments and payments on accounts for self assessment tax returns. (16:37)
• Why you should save 20% of your turnover for your income tax bill. (18:28)
• Can you make a business more tax efficient? (30:11)

Bookkeeping

• Jed’s 15-minute-a-day rule to save time bookkeeping. Few business owners can sit down for more than 15 minutes uninterrupted – so leaving it to pile up is a bad idea. (20:53)
• What happens if you leave all your record keeping to the end of the year (23:28)
• The VAT threshold increasing from £85,000 to £90,000, and what inflation means for all this. (34:30)
• When should you register for VAT? For most businesses, sooner is better than later. (36:15)
• Being VAT registered gives customers a bit of confidence, too. (41:13)

When your company grows

• The different types of business owners & how they view the future. (26:20)
• Formulating a business plan. (28:00)
• The general rule of thumb for when you want to incorporate your business. (33:39)
• Why taking a combination of salary and dividend saves money on national insurance tax. (42:28)
• If you’re planning to give shares to key employees, you’ll want a shareholders agreement. (51:30)
• The four ways to grow your business (1:07:54)
• Why the first person you employ is always the hardest – it becomes easier for all the following hires. (1:12:38)

Hiring an accountant

• What you need to look for when finding an accountant. (54:15)
• What qualifications you should look for in an accountant. (55:55)
• Accountancy trade organisations, and why they’re important. (1:01:15)