By : Carys Faulkener
Most business owners don’t have the know-how, time, or inclination to sort out their own books and taxes – that’s why they hire accountants. Nonetheless, even if you pay someone to help with your accounts, it doesn’t mean you can shirk all responsibility for keeping on top of the bookkeeping nor expect your accountant to do all the legwork. You can save yourself money and your accountant time by learning what information they will require when sorting out your tax return and those all-important end of year finances.
Nicole Odeh, founder of the Small Business Accounting Solution and all-round tax expert, says that when asked by clients what information she needs from them, her unwavering response is “everything”. Of course, it’s no mean feat to keep track of all your expenses throughout the year but the more information you can provide, the more money you are likely to be able to claim back – so it’s worth it in the long run. Whether they’re for items worth £1 or £1000, keep all receipts filed away and categorized, if possible, to make things simpler. If you prefer a more modern approach, there are apps available these days, like Expensify, which help organize all your receipts by using your smartphone’s camera to capture an image of the receipt and then drop-down menus to place them into categories. For online purchases, remember to keep invoices whether a hard-copy or an email copy. The tax revenue offices will usually need to know the ‘what’ of your purchases as well as how much they cost.
While expenses might be an obvious thing to worry about providing, other information is less so. Monthly bank statements, credit card statements, utility and phone bills are necessary for accountants not only to analyze your business’ finances but to see whether you qualify for certain tax deductions. Even if you run a small business from home, you should still provide all utility and phone bills as your accountant will be able to work out if you qualify for tax allowances or reliefs for self-employed or for home-office use. Most bank accountants will give you access to PDF copies of your bank statements and the same is true for utilities providers when it comes to bills.
The best thing about having an accountant is authorizing them to deal with the tax revenue offices on your behalf. They will advise you on the forms that you will need to file or submit to these offices but you need to keep and monitor these forms especially those pertaining to your end-of-year tax return. There are varieties of forms depending on your type of business which are always available from your tax revenue offices.
Carys Faulkener is a freelance financial writer, currently working alongside Alexander & Co. Accountants in Salford