Why bookkeeping isn’t just data entry

Feb 19, 2023 | Bookkeeping

Why bookkeeping isn’t just data entry

Keyboard, pen, folder entitled bookkeeping, small plant

As a bookkeeper I hear people assuming that my job just involves data entry. This is simply because people don’t necessarily understand what bookkeeping is. In this blog it’s my aim to clarify that bookkeeping is much more than just entering data.

A bookkeeper plays an important part in every business. Not only is it a legal requirement for every business to keep financial records but it’s essential to ensure you keep your cash flow nice and healthy and that your business is heading towards success.

Bookkeeping may be a job which you think you can manage yourself and that may be true to begin with, but it will soon become apparent that there are areas of your business that require your attention more than the accounts. When this happens it’s important to seek professional assistance as your growing business can soon become out of control if you’ve not got the right processes in place.

At Cactus Bookkeeping we help businesses to streamline their bookkeeping, making it more accurate, which then helps you become more efficient as a business owner. We will go above and beyond what you did to manage your books. By this we mean we use the data we have to do cash flow forecasting for your business and produce insightful reports. Without this information, you can’t make important business decisions, and you will never really know your true financial position. This information, we can review together, and we can help you to understand what it means for your business and its future success.

We offer software training and support, so if you do want to do the bookkeeping yourself you will be able to understand exactly what you are doing and what software is right for your business.

We also help our clients to save money by reviewing their business transactions. We can ensure you’re not paying for software you don’t use, subscribed to things you don’t get the most out of and make suggestions to change providers. We can also make sure you have agreements in place with suppliers so you’re getting the best discount possible to make your business more profitable.

What else can we do for your business?

If you have employees we also offer a payroll service. You no longer need to worry about deadlines and changing legislation as we’re there to make sure you’re compliant. We will keep your employees nice and happy by paying them on time every time. You can find out more about our Payroll services here.

Are you a VAT registered business? We can help you to set budgets in order for you to keep on top of your VAT bill, providing you with monthly updates on your VAT liability. We will prepare and file your VAT return and keep you in the loop when it comes to any payment deadlines. This takes the stress away from you worrying about all the various different deadlines you have to meet with HMRC.

>>>find out more https://www.cactusbookkeeping.uk/vat/

So you see, a bookkeeper’s job is far more than just data entry. If your business is in need of more than just data entry to stay in control and get a better insight into the direction your business is heading then reach out today and book a discovery call.

>>>https://calendly.com/sue-281/15min

Book a discovery call

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ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

HMRC changes to VAT penalties and interest charges comes into effect 1st January 2023

Jan 3, 2023 | All Categories, VAT

HMRC changes to VAT penalties and interest charges comes into effect 1st January 2023

For VAT periods starting on or after 1^st January 2023, the default surcharge fee for filing late VAT returns has been replaced with a new penalties system. Note nil or repayment returns will also need to be filed on time to avoid incurring penalties.

What happens if you submit your VAT return late

Late submission penalties will work on a points-based system. For each VAT return you submit late you will receive one late submission penalty point.

Once a penalty threshold is reached, you will receive a £200 penalty and a further £200 penalty for each subsequent late submission.

The late submission penalty points threshold will vary according to your submission frequency:

Submission Frequency	Penalty Points Threshold	Period of Compliance
Annually	2	24 months
Quarterly	4	12 months
Monthly	5	6 months

You will be able to reset your points back to zero if you:

submit your returns on or before the due date for your period of compliance — this will be based on your submission frequency as shown in the above table:
make sure all outstanding returns due for the previous 24 months have been received by HMRC

How will late payment penalties be calculated?

Up to 15 days overdue

You will not be charged a penalty if you pay the VAT you owe in full or agree a payment plan up to 15 days after your payment was due.

Between 16 and 30 days overdue

You will receive a first penalty calculated at 2% on the VAT you owe at day 15 if you pay in full or agree a payment plan on or between days 16 and 30.

31 days or more overdue

From this point on, the penalty will be calculated on a daily rate of 4% per year for the duration of the outstanding balance. This will be calculated when the outstanding balance is paid in full or a payment plan it agreed.

How late payment interest will be charged

HMRC will charge late payment interest from the day your payment is overdue to the day your payment is made in full.

Late payment interest is calculated as the Bank of England base rate plus 2.5%.

How late repayment interest will be calculated

HMRC will pay interest on refunds of VAT based on the latest of the due date or date of submission until the repayment date. The rate will be the Bank of England base rate minus 1%, with a minimum rate of 0.5%.

Whilst these new penalties and charges come into effect from the first return after 1^st January 2023, in order to give you time to get used to the changes, they will not be charging a first late payment penalty during the year to 31^st December 2023, if you pay in full within 30 days of your payment due date.

As a business, if you are struggling with making your VAT payment, contact HMRC at the earliest opportunity to enquire about a payment plan and avoid these penalties and charges.

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Staff Parties & Tax – What you need to Know

Dec 8, 2022 | All Categories

Staff Parties & Tax – What you need to Know

STAFF PARTIES

We are coming to the end of the year and it’s time to dust of the sparkly outfits and Christmas jumpers as we head into party season.

As an employer organising a staff party, there are a few things you need to keep in mind to take advantage of tax exemptions for your employee entertaining:

Tax exemption for employee entertaining is available if all the following apply:

🎄it’s an annual party or social function, such as a Christmas party or summer barbecue

🎄it’s open to all employees

🎄the cost does not exceed £150 per head (inclusive of VAT)

HMRC have confirmed that Virtual Christmas Parties are eligible for the annual function exemption.

Note – client entertainment is not generally an allowable expense. If your party has clients and employees attending, only claim for the amount spent on your employees.

* Do you hold multiple events a year?

If you hold multiple annual events e.g., barbecue and Christmas party, these events will remain exempt as long at the combined cost is no more than £150 per head.

If you have used up the £150 exemption on an event and have a further event in the year, you will have to report and pay tax on the full costs of the additional events, even if the cost is less than £150 per head.

Event Costs

For tax exemption, it is important to take care when working out the total cost per head, that it does stay under the £150 per head tax exemption. If the cost per head exceeds this exemption by even by a penny, then the full cost becomes taxable.

The cost per head is considered to be the total cost of the event from start to finish and include food & drink, transport and accommodation. The limit of £150 per head applies to the total number of attendees, so, if employees are allowed to bring guests, the total cost should be divided by the total number of employees and guests attending.

GIFTS

Gifts to Employees

The limit set by HMRC for an employee gift is £50 and cannot be cash or a cash voucher.

So, if you are thinking about giving your employees a Christmas gift such as a bottle of wine or box of chocolates, HMRC will not seek to tax these small gifts.

However, Christmas gifts paid in cash will be classed as taxable earnings.

Gifts to customers

Generally, client entertaining is not allowable for tax purposes, further, gifts for clients and prospective clients are also not allowed.

The exception is where the gift is small and advertises your company’s services. This excludes food and drink and vouchers/cash. The advert, such as the company logo must be on the item, not just the wrapping. Examples of gifts allowed includes gifts includes pens, diaries, mouse mats, clothing, and umbrellas.

The information given above contains general guidance, if you are unsure of any aspect of tax exemption for staff parties and gifts, please get in touch.

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Are your PAYE payments reaching the right place?

Sep 28, 2022 | Payroll

Are your PAYE payments reaching the right place?

Have you ever received a letter chasing for payment of your PAYE when you know you have paid it?

When making PAYE payments, it is vital that your 13-character Accounts Office reference number is shown, or your payments may not be recognised and will languish indefinitely in a black hole until you ring and claim it.

If you are paying on time, you just need to quote your 13-character Accounts Office reference, this can be found on:

the letter HMRC sent you when you first registered as an employer
if you use a payment book, it is shown on the front of the booklet
your business tax account if you have added Employer PAYE enrolment to it
your payroll software
speak to your PAYE agent is someone runs your payroll for you

What to do if you pay monthly but are late making your payment

If you are not paying the current period, you need to add 4 extra characters onto the end of your reference. These final 4 characters will show the year and month/quarter your payment is for this will make the reference 17 characters.

Example: for the tax year 2022/23 you are late paying 6 May to 5 June (Mth 2), your reference would be your 13-digit reference plus 2302 i.e., 111AB000000002302 (ref for example only)

As each tax period has a different payment reference number, if you have more than one payment to make, make two separate payments using the correct reference.

Tax Periods

6 Apr to 5 May, use 01
6 May to 5 Jun, use 02
6 Jun to 5Jul, use 03
6 Jul to 5 Aug, use 04
6 Aug to 5 Sept, use 05
6 Sept to 5 Oct, use 06
6 Oct to 5 Nov, use 07
6 Nov to 5 Dec, use 08
6 Dec to 5 Jan, use 09
6 Jan to 5 Feb, use 10
6 Feb to 5 Mar, use 11
6 Mar to 5 Apr, use 12

What to do if you pay quarterly but are late making your payment

The same applies as above, except you will need to quote the tax year and the relevant quarter number as follows:

6 Apr to 5 Jul, use 03
6 Jul to 5 Oct, use 06
6 Oct to 5 Jan, use 09
6 Jan to 5 Apr, use 12

Example: for the tax year 2022/23 you are late paying quarter end 5 October 2022 (Qtr 2), your reference would be your 13-digit reference plus 2306 – i.e., 111AB000000002306 (ref for example only)

Do not fall foul of accruing interest payments for payments you have already made. Use the correct reference and save yourself a whole lot of hassle trying to sort it out.

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Are you a VAT registered business not yet signed up to Making Tax Digital (MTD) – Your deadline is 31st October 2022

Aug 26, 2022 | Making Tax Digital, VAT

Are you a VAT registered business not yet signed up to Making Tax Digital (MTD) – Your deadline is 31st October 2022

There is no getting away from it, Marking Tax Digital (MTD) for VAT is fast approaching. All VAT registered businesses, regardless of whether they are under or over the £85,000 threshold, will no longer be able to use their existing VAT online account to file their quarterly or monthly returns after 31𝙨𝙩 𝙊𝙘𝙩𝙤𝙗𝙚𝙧 2022.

For businesses that file yearly returns, they will no longer be able to use their existing VAT online account after 15𝙩𝙝 𝙈𝙖𝙮 2023.

By law, if they have not already done so, all VAT-registered business must now sign up to Making Tax Digital (MTD) and use MTD-compatible software to keep their VAT records and file their VAT returns.

Using MTD software to keep digital records and file VAT returns

is not enough, you MUST sign up to MTD for VAT before

you file your next return.

Not yet signed up for MTD, check out the steps below to become MTD compliant and avoid possible penalties that may be levied

Chose MTD-compatible software that is right for you and your business. Here at Cactus Bookkeeping we use FreeAgent, QuickBooks, Sage and Xero, however HMRC’s website has a huge list of MTD compliant software which can be found at https://bit.ly/MTDCompatibleSoftware

It’s important to find software that is right for you and your business and if you are in any doubt about which one is right for you, speak to a bookkeeper or accountant who can offer an unbiased view based on you and your business requirements.

Sign up for MTD at https://bit.ly/SignUpForMTD Remember, just using MTD compliant software is not enough, you must sign up for MTD.

To sign up for MTD you will need the following:

your business email address
a Government Gateway ID, if you do not have one, you can create this when you use the service
your VAT registration number and latest VAT return

You will also need:

your National Insurance number if you are a sole trader
your company registration number and Unique Taxpayer Reference if you are a limited company or registered society
your Unique Taxpayer Reference and the postcode where you are registered for Self-Assessment if you are a general partnership
your Unique Taxpayer Reference, the postcode where you are registered for Self-Assessment and your company’s registration number if you are a limited partnership

Check the permissions in the software – once you have allowed it to work with MTD, you can file your VAT returns. Go to https://bit.ly/SoftwarePermissions

Keep digital records for your current and future VAT returns. Nothing has changed in this regard, you need to keep paperwork relating to everything you buy and sell (including zero-rated, reduced and VAT exempt items). Also keeping bank statements, cash books, cheque stubs, paying-in slips and till rolls.

You must keep some VAT records digitally, unless you are MTD exempt, and these can be found at https://bit.ly/DigitalRecordKeeping

How to apply for an exemption from using software

If you are already exempt from filing VAT returns online or if your business is subject to an insolvency procedure, you are automatically exempt.

You can check if you can apply for an exemption at https://bit.ly/ExemptionfromMTD if it is not reasonable or practical for you to use computers, software of the internet. HMRC will consider each application on a case-by-case basis.

If MTD for VAT is filling you with dread, please get in touch for a chat to see how we can help.

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call