I buy and sell houses and I run a major construction business. During the past 12 months my construction business has really taken off and I have completed a lot of major projects.
I keep receiving fines from HMRC for VAT, which I routinely pay. I want to know what I should be doing to stop this. Recently I received a request for 2009 - 2010 company accounts. I'm not sure how I should go about doing this.
I am Latvian and I am not familiar with the UK TAX system and I need clear instructions on what I should be doing on a month by month basis. What am I entitled to claim back? I sometimes have more outgoings because I pay my workers weekly from my personal bank account and also building materials are purchased weekly. I was told by a friend that my workers must be paid using a PAYE system. Is this feasible for a small team of less than 10 people? I pay my workers out of my personal bank account. i.e. cheques from £1,000.00 - £3,700.00.
For example, when I buy building materials I pay the VAT but I am not sure how to reclaim this.
At the time of setting up my company I was not allowed by my bank to open a business bank account. I have tried so many times but apparently my credit rating remains low. Is there any way of opening a simple business bank account? I do not want to borrow money. I just want to use it to pay my workers and for my customers to have peace of mind that I am not going to run off after they have paid me a deposit.
Please note that I would ideally like to do most of the accounting with my wife as she studied mathematics at degree level. We are both intimidated by VAT and tax returns but we just need to be shown what we should be doing.
Better still, if someone can point us to a step-by-step website or book then we can take it from there.
Your advice is very much appreciated.
Jerksi Laguta.
Apologies if I offended anyone with my poor English. I am still learning and this was done using Google translate.
welcome to the forum. No offence taken and your post made perfect sense.
to quote from your post.
your business has taken off, you have a lot of major projects, this is a construction business (I'm assuming proper business rather than merely a construction worker).
After saying that this is a legitimate business though you go on to state that you pay your workers from a personal rather than a business bank account! That's not a good sign.
Rather than attempting to teach you how things work it sounds to me as though your business is large enough to support using a bookkeeper to handle the books freeing up your time to concentrate on running the business.
You will need a good quality bookkeeper to get you sorted out. Try posting an Ad with the ICB for a qualified self employed bookkeeper in your area to come and help you out.
For your business I think that you will really need someone who is quite experienced rather than newly qualified.
Bookkeepers are not accountants and I would also strongly advise using the advice of your bookkeeper to identify a good local accountant for your business to handle the end of period returns and to represent you with HMRC.
The top accountants are charterd (ICAEW, ICAS or ICAI). Next level down the tree is chartered Certified (ACCA). There are other bodies such as CIMA and IFA. Your bookkeeper will be able to tell you who is considered best in your local area.
Having a good account on board also helps with HMRC as they know that accountants must act within the remit of accounting standards, company law and tax legislation which will give more credence to your returns.
I am sure that you appreciate that business is something that cannot be done properly on the cheap. However, in your instance I think that the fee's for a bookkeeper and accountant will be much less than you are currently paying in fines, penalties, surcharges and interest making not having professional help a false economy.
Good luck with the continued success of your business.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
snap. We're definitely singing from the same hyme sheet on this one.
as usual I wrote too much which in this instance may quite literally get lost in translation.
I may be reading the business larger than it actually is so the suggestion of the bookkeeper as well as a local accountant may be overkill.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thank you for the advice Shamus. No thank you to Nick for your condescending comment, You have many issues which need dealing with.
@ Shamus, the more information you post the more knowledge we all obtain. What is obvious to you might not be obvious to everyone else. Previous to your post, I was not even aware of http://www.bookkeepers.org.uk.
I have already read a lot of your posts on this forum and have gleaned valuable information from them.
I know for a fact that there are plenty of other small businesses in my situation. I will notify my colleagues of http://www.bookkeepers.org.uk.
Does anyone know the current market rates a qualified self employed bookkeeper is likely to charge in London? Yes, I sad London.
for London Market rates start at around £15 per hour but may go as high as £25 per hour which would be a starting rate for accoutancy services froma qualified accountant (average for accountants is nearer to £35 per hour).
Price charged is not always an indication of quality so go either on recomendation from other business people or advertise for a bookkeeper with the ICB or through this site and then ask the bookkeepers that you speak with for references from other businesses that they have worked with.
I think that you may have misunderstood what Nick meant. By "many issues that need dealing with" what Nick was actually saying was that there are many area's of your business that need to be looked at by a professional bookkeeper or accountant in order for your systems and processes to be set up properly for keeping HMRC satisfied that your company and more to the point tax matters are being managed correctly.
This was just a misunderstanding in translation and Nick was not saying anything that was insulting or derogatory. We're professionals, we don't do that.
I do believe that if your business is growing as you say then your business needs an accountant as well as a bookkeeper.
Using a good bookkeeper will keep your accountancy fee's lower than if you did not have a bookkeeper.
Hope that this helps,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I buy and sell houses and I run a major construction business. During the past 12 months my construction business has really taken off and I have completed a lot of major projects.
I keep receiving fines from HMRC for VAT, which I routinely pay. I want to know what I should be doing to stop this. Recently I received a request for 2009 - 2010 company accounts. I'm not sure how I should go about doing this.
I am Latvian and I am not familiar with the UK TAX system and I need clear instructions on what I should be doing on a month by month basis. What am I entitled to claim back? I sometimes have more outgoings because I pay my workers weekly from my personal bank account and also building materials are purchased weekly. I was told by a friend that my workers must be paid using a PAYE system. Is this feasible for a small team of less than 10 people? I pay my workers out of my personal bank account. i.e. cheques from £1,000.00 - £3,700.00.
For example, when I buy building materials I pay the VAT but I am not sure how to reclaim this.
At the time of setting up my company I was not allowed by my bank to open a business bank account. I have tried so many times but apparently my credit rating remains low. Is there any way of opening a simple business bank account? I do not want to borrow money. I just want to use it to pay my workers and for my customers to have peace of mind that I am not going to run off after they have paid me a deposit.
Please note that I would ideally like to do most of the accounting with my wife as she studied mathematics at degree level. We are both intimidated by VAT and tax returns but we just need to be shown what we should be doing.
Better still, if someone can point us to a step-by-step website or book then we can take it from there.
Your advice is very much appreciated.
Jerksi Laguta.
Apologies if I offended anyone with my poor English. I am still learning and this was done using Google translate.
Wow, sorry you took my comment the wrong way. You're heading included the words "completely clueless", you mentioned receiving fines from HMRC re VAT, you mention being "intimidated by VAT and tax returns", and you think that that will all change by asking a few questions on a website, to which people provide their views and advice for free.
As you state, "I buy and sell houses and I run a major construction business" - my view in this scenario, and in light of your other statements, is that you should get help. I wasn't trying to be condescending, just helpful.
Shaun, thank you for being diplomatic as ever.
-- Edited by gbm on Monday 30th of May 2011 03:05:10 PM
welcome to the forum. No offence taken and your post made perfect sense.
to quote from your post.
your business has taken off, you have a lot of major projects, this is a construction business (I'm assuming proper business rather than merely a construction worker).
After saying that this is a legitimate business though you go on to state that you pay your workers from a personal rather than a business bank account! That's not a good sign.
Rather than attempting to teach you how things work it sounds to me as though your business is large enough to support using a bookkeeper to handle the books freeing up your time to concentrate on running the business.
You will need a good quality bookkeeper to get you sorted out. Try posting an Ad with the ICB for a qualified self employed bookkeeper in your area to come and help you out.
For your business I think that you will really need someone who is quite experienced rather than newly qualified.
Bookkeepers are not accountants and I would also strongly advise using the advice of your bookkeeper to identify a good local accountant for your business to handle the end of period returns and to represent you with HMRC.
The top accountants are charterd (ICAEW, ICAS or ICAI). Next level down the tree is chartered Certified (ACCA). There are other bodies such as CIMA and IFA. Your bookkeeper will be able to tell you who is considered best in your local area.
Having a good account on board also helps with HMRC as they know that accountants must act within the remit of accounting standards, company law and tax legislation which will give more credence to your returns.
I am sure that you appreciate that business is something that cannot be done properly on the cheap. However, in your instance I think that the fee's for a bookkeeper and accountant will be much less than you are currently paying in fines, penalties, surcharges and interest making not having professional help a false economy.
Good luck with the continued success of your business.
kind regards,
Shaun.
Really? Why is ICAEW top of the tree compared to ACCA
BTW I agree with everything else!
__________________
Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
lol. Think that I've just been hanging around chartered accountants so much you start to believe the hype!
I suppose one way to think about it is that when you've attained ACCA membership many accountants go on under the dual membership agreement to become chartered (you still have to keep your original ACCA memebership).
However, you don't find any chartered accountants queueing up to become chartered certified as even now they tend to look down on it as a lower qualification.
Also worth noting is that when ACCA accountants become chartered they only make reference to their chartered status in advertising and make no reference to ACCA even though they are still ACCA members.
As far as the technical difference between what chartered as opposed to chartered certified accountant knows I think that the answer there is diddly squatt. However, chartered are invariably able to demand higher fee's for their status at the top of the tree.
As you know, I'm PQ ACCA so shooting myself in the foor a bit by telling it as it is.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
lol. Think that I've just been hanging around chartered accountants so much you start to believe the hype!
I suppose one way to think about it is that when you've attained ACCA membership many accountants go on under the dual membership agreement to become chartered (you still have to keep your original ACCA memebership).
However, you don't find any chartered accountants queueing up to become chartered certified as even now they tend to look down on it as a lower qualification.
Also worth noting is that when ACCA accountants become chartered they only make reference to their chartered status in advertising and make no reference to ACCA even though they are still ACCA members.
As far as the technical difference between what chartered as opposed to chartered certified accountant knows I think that the answer there is diddly squatt. However, chartered are invariably able to demand higher fee's for their status at the top of the tree.
As you know, I'm PQ ACCA so shooting myself in the foor a bit by telling it as it is.
I guess it is the snobbery aspect. It is certainly true from my time in practice that Chartered people feel at the 'top of the tree'!
__________________
Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
snap. We're definitely singing from the same hyme sheet on this one.
as usual I wrote too much which in this instance may quite literally get lost in translation.
I may be reading the business larger than it actually is so the suggestion of the bookkeeper as well as a local accountant may be overkill.
I wouldn't have said so, Jerksi mentioned that he ran a major construction business and had completed a lot of major projects, which I would quantify at least £1m t/o, probably more like £3m-£4m.
After my initial post it occured to me that what one person considers large another may consider inconsquential.
My original post was along the lines of yours and assumed a bookkeeper and accountant was necessary for this business.
By the follow up answer to yourself I was thinking maybe Jerksi was actually a construction contractor (with some employee's) doing well which is a quite different kettle of fish.
This is one of those cases where one tries to give an answer from a perspective of having no real idea of the true scale of the business but the answer given is very much dependant upon such.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I would say that the OP certainly needs professional help, not just with his accounts and VAT but on PAYE, if he has been paying workers the amounts specified gross, he could be in for some pretty substantial paye and ni claims from HMRC. He needs to sort out either/or or both PAYE/CIS as soon as possible.
