Hi really need some advice on some questions, bit long winded so please bear with me. I have been working as a bookkeeper on a self employed basis for around 6years i was oringally employed doing this. I completed any bookkeeping exams as i had on the job training and gained all the experience over the years, however i now think i would like to get proper certification etc but need answers to the following.
1. is there much benefit to me getting qualified on paper or not? i did do the aat level 2 bookkeeping certificate from home but never actually took the exam. all my existing clients were passed to me by an accounting firm so my clients are not bothered that i dont have the actual qualification.
2. i use sage instant accounts and also line 50 and i know that sage doing certification aswell, would this suffice?
3. Also i do the day to day accounts for these companies then pass the accounts onto the accountants where they do the year end formal accounts. on reading various places it seems that some bookkeepers even do the formal year end where others dont??? can anyone explain why this is? i would like to be able to do the formal end of year accounts for companies but dont feel confident to do this where as i am very confident in my work on the day to day bookkeeping up to year end. what training would i need to do this?
4. i once asked the accountant if i needed to register for the mlr and was told that i didnt really to, i take it that maybe that was because all of my work is obviously checked by the accountants when doing year end, is this correct? if i do need to register with hmrc then it states that you pay around £100 for each registered address, what does this mean as I do half of the clients accounts at home and the other half i do at clients premises so does this mean i need to register everry single company i do bookkeeping for which would be a ridiculous charge or do i just register my address?
1) Qualifications on Paper always look good and if your a member of an association such as AAT of the ICB, then you can use the logo's on your stationery and website etc... so it makes you look more official and looks like you could do the job in the eyes of potential clients.
Then again, many of my clients dont even know what the qualification even mean and dont pay that much attention to them anyway. But yes I would recommend doing it if not only for a refresher of existing knowledge.
2) Doing a Sage Certification course could be a good move if your not familiar with the software. If you happy using as you are then you don't need to do it.
3) Some Bookkeepers do all the year end work, such as bank rec's, prepayments and accruals, Depreciation calcs, afterdate invoices, stock, bad debts and all the other adjustments up to final TB. Basically they do a balance sheet audit to ensure the accounts are correct before passing to the accountant for a final review and and final tweaks. This tends to come with experience or if you have an accounting back ground. (Fortunately I have 10 years of this so I can offer this service to my clients). If you wanted to know this, then perhaps look at completing the AAT as a lot of this is covered in their examinations and study text.
4) With regards to MLR it is my understanding that all bookkeepers should should be registered, however I do remember reading somewhere that if the work is passed to you by an accountant, rather than you actually obtaining the client, then you may not need to register. Hopefully someone can confirm this. I have my views on MLR but I wont bore you people with them.
Re your third question, it is not only a question of confidence but also competence. If you move from simply doing bookkeeping to offering more general accounting services, your knowledge base and understanding of the tax system will need to increase substantially. I am not trying to put you off, but I have come across the scenario a few times where small businesses have used someone to complete their tax return because it was only £100. However, when we have taken over, we have found problems with losses, capital allowances, and general bad/poor advice.
I know it sounds like I'm trying to put you off - I'm not, I just want you to be aware of the risks of going to do something that could have repercussions. We have all done things in our lives that have kept us awake at night!
Hi Merlion thank you for your advice. I think you ar right being a member of one of the organisations would be an advantage on paper even though most clients dont know what they mean but i suppose it does look more professional. i do alot of the bits up to year end such as prepayments/accruals etc but its the other bits such as depreciation, bad debts etc that i have never really completed as the accountants have always done that but just wondered if really that is expected by a bookkeeper. i have heard of some bookkeepers actually doing the year end reports and returns for companies house but i was under the impression that these had to be signed off by a chartered accountant????? am i right or wrong on this?
as for the mlr registration it seems to be a very vague area if i did have to register was i right in thinking that the fee has to be paid for each client even though i work from home for some and some i work at their office, what do they class as the registered address is that mine or theirs?
Re your third question, it is not only a question of confidence but also competence. If you move from simply doing bookkeeping to offering more general accounting services, your knowledge base and understanding of the tax system will need to increase substantially. I am not trying to put you off, but I have come across the scenario a few times where small businesses have used someone to complete their tax return because it was only £100. However, when we have taken over, we have found problems with losses, capital allowances, and general bad/poor advice.
I know it sounds like I'm trying to put you off - I'm not, I just want you to be aware of the risks of going to do something that could have repercussions. We have all done things in our lives that have kept us awake at night!
i totally agree in the confidence versus competence although i am confident in my general bookkeeping i dont feel confident in the more complex issues of tax etc and to be honest i always believed this side of things is more of an accountants role as tax issues are very complex and changing all the time. i just wanted to be sure i was doing everything i should be as a bookkeeper.
KEELY wrote:as for the mlr registration it seems to be a very vague area if i did have to register was i right in thinking that the fee has to be paid for each client even though i work from home for some and some i work at their office, what do they class as the registered address is that mine or theirs?
In a nutshell Keely
If you act in a self employed professional capacity as a bookkeeper, you need to be registered for MLR, regardless of where you work, or who you work for. You pay a one off annual fee. It's your business address that is registered, so unless you operate from several offices, you only pay one fee. In your case probably to HMRC
If you are passed work from another regulated person (an accountant) it may not be necessary to do all the due diligence checks yourself, you can, if the accountant agrees, use their due diligence and proof of ID etc (you still need to be registered).
If you are employee doing bookkeeping for a non financial body (say a building company), you do not need to register. If your are employed in a business that deals with financial matters (an accountancy firm), you do not need to be registered but would need to know the reporting procedures.
Surprised that the accountant said you didn't need to be registered.
HTH Bill
-- Edited by Wella on Tuesday 22nd of March 2011 11:20:06 AM
KEELY wrote:as for the mlr registration it seems to be a very vague area if i did have to register was i right in thinking that the fee has to be paid for each client even though i work from home for some and some i work at their office, what do they class as the registered address is that mine or theirs?
In a nutshell Keely
If you act in a self employed professional capacity as a bookkeeper, you need to be registered for MLR, regardless of where you work, or who you work for. You pay a one off annual fee. It's your business address that is registered, so unless you operate from several offices, you only pay one fee. In your case probably to HMRC
If you are passed work from another regulated person (an accountant) it may not be necessary to do all the due diligence checks yourself, you can, if the accountant agrees, use their due diligence and proof of ID etc (you still need to be registered).
If you are employee doing bookkeeping for a non financial body (say a building company), you do not need to register. If your are employed in a business that deals with financial matters (an accountancy firm), you do not need to be registered but would need to know the reporting procedures.
Surprised that the accountant said you didn't need to be registered.
HTH Bill
I can see where the OP is coming from. When I first heard of MLR I thought you had to pay a fee for every location you carried out bookkeeping work. That's why I decided on going for ICB membership rather than HMRC. I know now but I'm glad I did go the ICB route. Better for me in the long term.
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Never buy black socks from a normal shop. They shaft you every time.
I have two questions, firstly can anyone confirm how much the MLR costs with HMRC, I've just written a cheque for £160, as I was informed that it costs £110 to register your place of business and £50 for "a fit & proper" test only to find in some HMRC literature on their website that it costs £95 to register plus the £50 for the fit & proper test.
I was thinking of going the ICB route myself, thinking it may be cost efficient for me and less time consuming, as I already have some qualification and experience. I even went along to a CPD seminar they held in Glasgow during the week and and the guy who spoke all evening (Gary) I believe, couldn't stress it enough the importance of having this MLR before one starts out self employed that I decided to write the cheque to HMRC the very next morning only to find that I may have been ill informed of the costs involved. Would HMRC refund the difference? I know its only £15 and it may sound like trying to draw blood from a stone, but sure HMRC should refund the difference if one has overpaid.
Now to my second question...this is VAT related. A prospective client whose business is not VAT registered has asked me if I were to do his books would I charge him VAT. I am afraid I sounded a bit foolish in my response and said yes I would charge him VAT as I was selfishly thinking of myself and how if I did not charge VAT on my services will affect my ability to reclaim back VAT on my purchases which I have surprisingly incurred so much of trying to set up my business. Is there anyway round this at all, can I issue a non VAT registered client with an invoice with VAT and will the client be well within their rights to decline to pay the invoice including the VAT or can I just not be VAT registered myself then, I will not have to charge VAT but the downside to that will be not being able to reclaim VAT. Obviously I wouldn't want to go against any laws and I do not want to be out of pocket to the VAT man either!
Are you VAT registered and do you have a VAT registration number? It's hard to tell when you say you have just started up.
If you haven't received your VAT registration number yet you cannot issue invoices with VAT on them. If you are waiting for the registration number I understand you issue an invoice without the VAT now along with a note to say that VAT will be added to this invoice when the registration number arrives. If you already have the VAT registration number ignore the above.
As for VAT registration, if you think most of your customers are going to be VAT registered then voluntary registration may be an option. If they are not going to be VAT registered and you are, then your price is going to be 20% higher than any rivals that aren't VAT registered. If your turnover is above £73,000 (from 1st April) then you have to register.
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Never buy black socks from a normal shop. They shaft you every time.
It sounds like you are not yet registered to charge VAT. From my own experience, I would avoid registering if I can, as my charges are for services I provide., and I mainly provide them to non VAT traders. Those that are VAT registered are not affected
The small amount of VAT I pay on expenses & purchases, does not warrant trying to claim it back. The benefit of being able to quote without VAT outweighs the additional cost on the initial set up expenses.
Just to clarify, if you are VAT registered, then you have to charge VAT, and the client owes you the full amount, inclusive of the VAT. He cannot refuse to pay it just because he is not registered.
Thanks (Peasie)? and you Bill for your replies. I am not yet VAT registered, but I was planning too. Anyways, it seems I will probably have to reconsider as I think many of my clients will not be VAT registered. I just wasn't sure if one had to raise invoices with VAT whether you were registered or not as long as the services or goods provided were Vatable and again, I was also thinking of my recent purchases in trying to start up and all the VAT I have paid on them, but as you said Bill, it probably does not warrant claiming it back and therefore not necessary to register for VAT as I would probably be pricing myself out of the market if I do so!
You will not be able to claim VAT of any services you provide to your customers unless you are registered for VAT your self. Once you are registered you will be able to charge Value Added Tax on your services regardless of your clients being registered to VAT or not...
