Category: Business Help

What is business compliance?

Posted on | by Jade Donno

Unraveling the Complexity: UK Business Compliance in Accountancy

In today’s swiftly shifting regulatory environment, understanding UK business compliance in the realm of accountancy has never been more vital. With businesses continually subject to various rules and regulations, understanding compliance is key to maintaining a healthy, thriving, and legally compliant business. Let’s take a deeper look at what this entails and why it is so important.

What is Business Compliance?

In the simplest terms, it refers to the process of ensuring a business adheres to all the necessary laws, regulations, and standards relevant to its operations. This extends across multiple levels – from local to national, and sometimes even international.

In the world of accountancy, compliance includes adhering to the various reporting and accounting standards set forth by the relevant governing bodies, tax obligations, auditing procedures, and financial management. This process is mandatory and neglecting it can lead to significant consequences, including hefty fines and penalties, damage to the business’s reputation, or in severe cases, even closure of the business.

Key Areas in Accountancy

  1. Tax Compliance: This is one of the most critical aspects of. It involves understanding and adhering to the tax laws as prescribed by HM Revenue and Customs (HMRC). This includes paying corporation tax, VAT, PAYE, and national insurance contributions, as well as proper reporting and record-keeping.
  2. Financial Reporting: Businesses are required to adhere to the Financial Reporting Standards (FRS) in the UK. These standards outline how businesses should prepare and present their financial statements, ensuring transparency and uniformity. Small and micro businesses may adhere to FRS 105, while medium and large companies will typically follow FRS 102.
  3. Audit: Depending on the size and structure of the business, it may be legally required to have an annual audit conducted by a registered auditor. This ensures the business’s financial statements are accurate, providing reassurance to shareholders, investors, and other stakeholders.
  4. Companies House Reporting: UK businesses are required to file certain documents with Companies House, including annual financial statements and confirmation statements, which provide updated information about the company’s directors, shareholders, and registered office.
  5. Data Protection: Though not strictly accounting, the General Data Protection Regulation (GDPR) has important implications for the way businesses manage and protect their financial data.

Why is Compliance Essential?

Maintaining compliance is fundamental to the successful operation of any business. It protects the business from legal and financial penalties, supports operational efficiency, and upholds the reputation of the business. Additionally, it can build trust with stakeholders, including investors, customers, and employees, which is crucial for the long-term sustainability of a business.

Compliance in the Digital Age

In today’s digital age, many businesses are adopting accounting software solutions to assist in maintaining compliance. These tools can streamline processes, enhance accuracy, and provide alerts for upcoming compliance deadlines, significantly reducing the risk of non-compliance.

In Conclusion

Understanding UK business compliance in accountancy is an ongoing task due to evolving regulations and standards. It is crucial for business owners to stay updated and ensure they meet all compliance requirements to avoid penalties, protect their reputation, and foster trust among stakeholders. Consider seeking professional advice from accountants or solicitors, who can help navigate the complexities of business compliance and ensure your business remains on the right side of the law.

should I become a limited company - thinking

Should I Become a Limited Company?

Posted on | by Jade Donno

A common dilemma faced by many budding entrepreneurs and freelancers in the UK is: should I become a limited company? This question arises as a natural step in the growth journey of any small business or self-employed professional. But, deciding to incorporate a limited company is a crucial decision that can have far-reaching implications on various aspects of your business. Let’s break this down to help you make an informed decision.

Understanding Limited Companies

Firstly, it’s crucial to understand what becoming a limited company entails. It is a type of business structure where the company is an entity separate from its owners. This means that the company has its own legal identity, distinct from its directors (the people who manage the company) and shareholders (the people who own the company).

In the UK, limited companies can be categorised into private limited companies (Ltd), which cannot offer shares to the public, and public limited companies (plc), which can. For the purpose of this article, we will focus on private limited companies, as these are the most common choice for small businesses and freelancers.

Benefits of Becoming a Limited Company

Limited Liability

The primary advantage of incorporating a limited company is limited liability. In essence, if the company runs into financial trouble, the personal assets of the directors and shareholders are not at risk. The financial liability of the owners is limited to their investment in the company, providing a safety net against unforeseen business issues.

Tax Efficiency

Limited companies often enjoy more favourable tax rates than sole traders or partnerships in the UK. As a director, you can choose to take a combination of salary and dividends, the latter of which is taxed at a lower rate than income tax (dependent on company profits).

Credibility and Perception

Becoming a limited company can boost your business’s credibility. The perception of being a larger, more established entity can be beneficial in negotiating contracts and attracting clients or investors.

Considerations Before Incorporating

While the benefits are enticing, there are some important considerations to bear in mind before deciding, “Yes, I should become a limited company.”

Administrative Responsibilities

Limited companies face more stringent reporting requirements, including submitting annual accounts and reports to Companies House. This can increase your administrative burden and necessitate hiring an accountant.

Privacy

As a limited company, your business’s details, including director names and registered office addresses, become public record. Some business owners may not feel comfortable with this level of exposure.

Difficulty in Withdrawing Money

Unlike sole traders who can withdraw cash from their business without any tax implications, withdrawing money from a limited company is not as straightforward and can be subject to taxes.

Making the Decision

Ultimately, the decision to become a limited company is a personal one that hinges on your business’s specific circumstances. It’s essential to balance the potential benefits against the administrative, financial, and legal implications that come with incorporating.

Take into account factors such as the nature of your business, financial prospects, and tolerance for risk and administrative work. You should also consult with an accountant or business consultant to make sure you understand all the implications.

Should I become a limited company? It’s a question that deserves careful consideration. Done right, it could be the launchpad that takes your business to the next level. But, it’s vital to ensure you’re making the right move for the right reasons. So, take your time, do your research, and make the choice that best suits your business aspirations.

business success meeting

Your Pathway Business Success in the UK

Posted on | by Jade Donno

In today’s fast-paced, competitive world, achieving business success is a path fraught with many challenges. The journey to becoming a top-tier enterprise in Haverhill or any other part of the UK is more than just having a great idea—it requires a blend of strategic thinking, operational effectiveness, financial guidance, and above all, professional business coaching. At 1Accounts Online, we offer comprehensive business success services, unrivalled by any other UK business coaches.

A stalwart in the industry, our team of experienced business coaches in Haverhill and beyond have a proven track record in guiding businesses towards their envisioned success. We possess an understanding of the intricacies and unique hurdles of conducting business in today’s fluctuating markets. And through this understanding, we provide customised business help designed to fit your specific needs and goals.

Expert Business Coaches Haverhill

At 1 Accounts Online, our team of UK business coaches is committed to helping you unlock your potential. We see beyond the numbers and dive into the operational essence of your business. Our business coaches in Haverhill employ a hands-on approach, working closely with you to enhance your management skills, streamline your business operations, understand your financials and refine your strategic decision-making process.

Tailored Business Help for Success

Every business is unique, and so are its challenges and needs. We at 1 Accounts Online appreciate this fact and are dedicated to providing bespoke business help. We conduct a comprehensive review of your business operations, identify areas of improvement, and formulate strategies that cater to your specific objectives. Our goal is to empower you to overcome obstacles and steer your business to new heights of success.

Comprehensive Financial Guidance

Financial management is a cornerstone of any successful business. Without the right financial guidance, it becomes nearly impossible to make informed decisions. 1Accounts Online understands this vital need and provides comprehensive financial guidance. Whether it’s about managing cash flow, optimising capital expenditure, or understanding financial reports, our team is always at your side, ready to help.

The Business Success Service You Need

In conclusion, the key to business success lies not only in having a good product or service but in understanding how every facet of your business works together. With our extensive range of business success services, coupled with our team of experienced UK business coaches, we at 1Accounts Online stand ready to offer the business help you need.

Whether you’re just starting or are an established business in need of financial guidance or strategic coaching, consider 1Accounts Online. We’re not just business coaches in Haverhill—we’re your partners in prosperity.

confused person

Top 10 “I didn’t know that” questions answered

Posted on | by Jade Donno | Leave a Comment on Top 10 “I didn’t know that” questions answered

I didn’t know that?

This is a phrase we hear a lot, especially when someone sets up a limited company and especially in January when personal tax returns are due.

Here are our top 10 I didn’t know that questions

1 . I didn’t know that I needed a separate bank account?

  Yes, a limited company is its own entity and funds held in a personal account will be deemed personal income and could attract tax. Therefor you will need to set up a business bank account for your limited company.

2. I didn’t know I had to register to pay myself?

Yes you need to register with HMRC for a PAYE reference and deduct tax and NI on your earnings.  Note single director companies do not get the £5,000 employers NIC relief.

3. I didn’t know I paid tax on dividends?

Yes, you pay tax on dividends and these are declared on your personal tax return.  

4. I didn’t know you had to make a profit to declare dividends?

Yes, dividends are a distribution of profits and not an expense.  You need to prepare a profit and loss account, work our corporation tax payable and then you can declare a dividend.

5. I didn’t know I needed paperwork for the dividend?

Yes, you need a board minute and dividend voucher prepared on the day that you declared the dividend.  Backdating to ‘FIT’ your accounts is illegal.

6. I didn’t know I had to keep accounting records? 

Yes, HMRC require you to keep accounting records and the Companies Act.  We recommend Xero as an accounting software provider.  Giving over a years bank statements and records to prepare is expensive and you will have no idea of dividends you can vote if any.

7. I didn’t know I paid tax on monies taken from the company? 

Yes, if you have borrowed from your company you will pay tax on your Corporation Tax Return.  This is a holding tax that will be repaid once you are back in funds with the company.

8. I didn’t know my company had to register for VAT? 

Yes, if you exceed £85,000 in a rolling 12 months you must register for VAT and in some cases it is better if you do register for VAT.

9. I didn’t know I couldn’t run my car through the business?  

You can run the car through the business BUT it will be classed as a benefit in kind and you will pay tax on the benefit.  Some cars are much better through a Limited company than others.  Electric cars are a great benefit.

10. I didn’t know it was so complicated? 

This is where a good accountant will help you manage your limited company so that you comply with the companies act, HMRC and help move your business forwards.

 

Take a look at this video:

13 Ways an Accountant Can Help a Small Business Owner

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There are two huge mistakes that many start-ups or small business owners make. The first one is trying to manage their own accounting system. This is often done incorrectly which can hurt the business in the long-term. The second mistake is assuming that an accountant is only good for managing accounts and filing Tax or VAT returns.
An accountant is a financial guru and an all-around business advisor all in one. Accountants are an incredibly valuable member of any small business team as they can offer a lot more than just accounting to small business owners. Here are 13 ways accountants can help:

1) They can help you go from business idea to start up

They will give you advice on what you need to create the foundation for a successful business e.g. determining the best business structure, creating your business plan, opening a business bank account etc.

2) They can assist with the financial analysis in your business plan

They can also help with loan applications and forecasting.

3) They analyse your finances to determine where your business’ money is going

They can then advise you on where to make improvements in your processes and cash flow so your business can scale and grow.

4) They will explain your financial data so you can make financial decisions with confidence

A good accountant will break it down so you understand the ins and outs of your business at all times.

5) They close out your books and create end-of-year financial reports

With your reports, an accountant will recommend changes to budgets or forecasts.

6) They compile and submit your taxes and financial reports to HMRC and Companies House

As well as submitting, they can also calculate VAT, provide advice on estimated tax payments, and provide guidance.

7) They make sure that your accounting procedures comply with government regulations.

Legislation changes all the time. An accountant keeps up to date with these so they can check your company’s tax position and keep you compliant.

8) They oversee your company payroll and payment process

They can help you streamline your business processes to work smarter, not harder.

9) They can help you streamline your business processes to work smarter, not harder

They can provide advice on the type of accounting software that’s suitable for your business, how to track your expenses, and also invoicing and payroll. More time means more earning potential!

10) They can identify risks in financial transactions to prevent fraud

Many business owners want to identify investment opportunities too. An accountant can provide advice on this and check whether an investment is solid.

11) They can help you identify areas for growth in your business as well as ways to save money

By looking at cash flow patterns, inventory management, your pricing, business financing.

12) They will work with you to create a business budget and stay on track

Every business owner needs a budget to support their business goals. An accountant can actively help with this.

13) They can advise you on all the big things

Reports, taxes, audits, business strategy, you name it and they can probably help you with it. Need advice on property or equipment leasing and purchase? Need guidance or resources to assist with scaling the business? Guess who can help – Accountants!

Accountants are key to business success, wherever you are on your business journey

These are just some of the ways that accountants can work with you to support your business. Whether you’re launching a start-up, you’re a small business owner who needs help with running the business day-to-day or you’re wanting to really scale your business, an accountant can provide essential advice and guidance, every step of the way.

7 ways to have the right mindset for growth during a recession

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A fixed mindset is thinking that the recession means business stops and clients don’t want to spend money.
A growth mindset is using this recession as an opportunity to adapt and do things differently.
You bees the second mindset if you want to grow your firm doing the recession.
The only thing holding you and your firm back from growing right now is you. To help you move your practice forward, both now during the pandemic and during any future recessions, here are 7 mindset shifts you need to make.

1) Make peace with your reality

Suffering is what happens when you resist what is already happening. The sooner you confront the current reality and accept it, the quicker you can move past it.

2) Hold yourself accountable

If you want to grow, you need to think of the acronym R.O.A.D. You need to take Responsibility for the choices you’ve made, you need to take Ownership of where you want to go, you need to start taking Action, and you need to be Decisive. When making your strategy plan, be 100% accountable for putting it into action.

3) Don’t compare yourself to others

Some businesses are struggling, others are thriving. Don’t compare yourself to either. Every business owner, firm, and situation is different, so don’t disrupt your focus with doubt.

4) Prioritise delivering value

Concentrate on delivering exceptional service to your current clients. How can you offer extra value during this time? This will make you invaluable and it will ensure that you stand out from your competitors.

5) Focus on your strengths, not your ‘failures’

What work are you good at? What do you love to do the most? Which clients are your favourites to work with? Being positive during this time is essential, so focus on what you love and reflect on your principles and values. Rediscovering why you do what you do is very powerful when it comes to self-motivation and drive.

6) Fail fast and achieve quickly

Inaction is the worst thing you can do, not trying something and failing. During a time of such change, don’t procrastinate and don’t be a perfectionist. Take action, fail fast, learn from your mistakes, and concentrate on getting there first (not doing it perfectly and getting there last).

7) Be grateful and become self-aware

Practice gratitude every day by thinking about what you are grateful for both now and in your future. Also, take time to reflect and to rediscover your purpose. If you’re confident and happy, you will attract similar clients.

Adapt AND adopt

We have all had to adapt to some degree during the pandemic, for example, being forced to adapt to working from home. Changes such as these are necessary to our ‘survival’ during this time.
With that being said, however, it is the accountants who have both adapted and adopted changes of their own, who have thrived. These are the individuals who make quick and effective decisions, who take responsibility for changing their situation, and who take action.
Anyone can grow their firm during a recession, they just have to have the right mindset.

Starting your own business after redundancy

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Facing redundancy can be incredibly challenging, but it could also be the perfect time to start a brand new career based on your interests, your lifestyle and your aspirations.
Does this sound too good to be true?
With these five steps, we can help you transform your redundancy package into your very own startup:

1) Take advantage of your notice period

Typically, you’ll need to work a notice period. Instead of worrying about what comes next, use this time to start planning your new venture!
Dive into research, enrol in training and network as much as possible. The sooner you can start, the better! After all, wouldn’t you prefer to plan for your future whilst you’re still on the payroll?

2) Develop a business plan

Success is all about strategy, so it is important to develop a business plan.
Every business plan will look slightly different, but the main areas you want to focus on are the:

  • Executive summary – create a brief overview of your business detailing what services you offer and what you intend to achieve.
  • Management bio – this is your opportunity to introduce yourself, your values and your professional experience.
  • Marketing plan – identify your target audience, USP and market competitors before explaining how you intend to attract your desired audience.
  • Financial plan – because you’re just starting out, your financial plan will be primarily made up of projections (sales projections, expensive projections, cash flow projections etc.). Make sure you’re thorough with your research if you intend to achieve accurate estimates.

Your business plan will become the blueprint for your company, so the more information you can include, the better – particularly if you want to attract investors!

3) Address any legalities

To establish a legitimate business, you need to fulfil certain legal requirements. Now, these requirements may vary depending on your business model and industry, so it’s always worth checking whether you need to obtain a specific type of permit or insurance.
You can find these answers by visiting the government website or checking with your relevant industry bodies.
It is also worth hiring an accountant early on to advise you on the financial aspect of your business.

4) Open a business bank account

This next point is directed specifically to our sole traders. Although you don’t have to open a business account, we strongly suggest you do. It will make your bookkeeping 10x easier! So unless you want to waste your time separating your expenses and risk receiving a penalty, you should seriously consider setting up a business bank account.
If you are starting a limited company this is also something you will need to do, however it is essential rather than it just being strongly advised.

5) Set yourself boundaries

Starting a business is an exciting endeavour. However, it can become all-consuming. So for our final point we wanted to discuss the importance of setting yourself boundaries and practising self-care.
Firstly, give yourself some grace. Redundancy is incredibly difficult to navigate, so try not to be too hard on yourself – especially during those early days.
And secondly, start as you mean to go on. Give yourself lunch breaks, take time off and allow yourself opportunities to relax. Only then can you avoid burnout and achieve sustainable growth.

When life hands you lemons, make lemonade


No one wants to be made redundant – but that doesn’t mean it has to be all doom and gloom. Instead, this could be the start of your exciting adventure into entrepreneurship! So take the chance, pursue your passion and totally transform your career. You may just find redundancy works in your favour.

Hiring an accountant could save your business!

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A lot of new businesses fail. A lot of old businesses fail. A lot of previously successful businesses fail. Why? Usually, it comes down to issues around finances.

If you’re starting a new business, or if you’ve been in business for years and are trying to grow your team and scale your company, hiring an accountant can help. Here’s how.

1) They help you become more tax-efficient

Tax isn’t easy. Legislation changes all the time and any delays or mistakes could be costly. With an accountant filing your taxes for you, you can have the peace of mind that it is all being done correctly and on time. Not only that, but it saves you a lot of time and resources AND it saves you money. Accountants can reduce your tax burden by identifying opportunities for deductions, and they can help you avoid any government fines.

2) They mitigate the risk of financial mistakes

Accountants know how to identify financial risks and avoid them before they become major problems. What this means for you is that you’ll never spend money you don’t have, you will save money in all the areas you can, and you’ll be more aware and better equipped to stick to a proper budget. Fewer to no financial mistakes means minimal losses and more profit!

3) They actively help you to grow your business

If you get an accountant on board in the early stages of your business, they will help you to develop a plan for growing your business in the right way. Not only that, but they will also ensure that your finances are handled correctly from the beginning so that it doesn’t take over everything else in the future. As your business grows, they will start to provide advice in other areas such as budgeting and financing; payroll and recruitment, cashflow forecasting and investments, and business strategy. They will work with you to ensure you have the financial capabilities and processes needed to work towards your business goals.

Survive and thrive!

Most new businesses fail because of financial issues, so don’t make the same mistake. Hire an accountant as early as possible and get the guidance and expertise needed to take your business to the next level. They will not only help you save money, but they can help you make money as your business grows too.

The 9 step guide to business development

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Here at 1 Accounts we are invested in helping your business develop and succeed. We find allocating some time each week to business development is the best way to really make sure that your business grows according to your plan.

Business development is:

  • any activity that is nurturing the future of your business, not the day-to-day tasks that tend to drain the majority of your time.
  • about nurturing the right relationships so that you can create opportunities for your business and attract loyal clients who value what you and your firm do.
  • highly valuable and is key to the long-term, sustainable success of your firm

So how do you do it and do it well?

1) It’s all about the client

Rather than sell at potential clients, focus on what they need. Always listen to them first and demonstrate empathy with their problems before ever talking about yourself and your firm.

2) Address their problems and fears

Now you know their specific challenges and worries, address them. What’s the biggest headache for your clients and prospects? How can you alleviate this pain for them? Again, talk to them about what keeps them up at night and listen. They’ll tell you all you need to know.

3) Solve their specific problem

If you already have a product or service that solves their biggest pain point, great! If you don’t, create something from scratch. Diversifying could open you up to a whole new target audience.

4) Think about your main offering

In a single sentence, sum up what you offer to your clients and this will be your brand tagline. Steer clear of things like “we give a personalised service” and be more specific. Do you take away a specific fear and help your clients sleep at night? Do you give them more time to spend with their family?

5) Differentiate yourself with your website and social media

You need to be spreading the word about how you can help your clients. Essentially, you need to be helping them to find you. Make sure you have a high-quality website that is SEO-optimised and has pop-ups offering valuable resources. You will also need to be regularly active on social media.

6) Build your brand

This takes time, but becoming an expert in what you do will reap the rewards. Use your tagline offering in everything that you put out there and produce content consistently. Whether it’s blogs on your website or posts on social media, create that emotional connection and you’ll see that people will engage.

7) Make it easy to get in touch

People will take the path of least resistance so make it easy for them to contact you. Contact details should be easy to find on your website and all call to actions should be clear throughout your marketing materials.

8) Nurture the relationship

So much business is lost through a lack of following up, so be there in front of your clients and prospects to build those relationships. Every blog post you’re sharing or newsletter you’re sending out should offer value; it should answer a question or solve a problem or inspire action. There is real value in regularly being in front of your clients, just as long as what you’re saying is useful to your target audience.

9) Focus on getting your existing clients to buy more from you

You already have a great relationship with your existing clients and they already like you, trust you, and know first hand the value that you offer. It makes sense then, to help them get more from you.

It really is as easy as 1,2,3…9

While business development is essentially sales, you need to always be thinking about who you are targeting and what they want to hear, rather than talking about yourself and what makes your firm special. What are their specific problems and aspirations? Using these 9 steps, you can get creative with your messaging and really stand out to your prospects.

Payments on account

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If you complete a tax return you may have to pay your tax twice a year. This sounds like it should be bad, but it can be a helpful way of spreading your payments throughout the year.

What are payments on account?

Payments on account are made twice a year and are payments that you make towards your next tax bill. It is a way of bringing the tax collection closer in line with those who pay their tax monthly through PAYE.

Who has to pay?

If the tax liability on your last submitted tax return was over £1000 then you will automatically be set up for payments on account.

When do I have to pay?

You pay twice a year with payment deadlines on January 31st and July 31st however you can pay before these deadlines.

How is it calculated?

HMRC will use your previous tax bill to estimate how much tax it thinks you will be paying next year. It will then half this amount and charge you this in January and July, so in the following January you only have to pay what is left over, if any, and potentially the next payment on account. If you have overpaid, you will receive a refund, or if completing your tax return close to the deadline it will be deducted from the next payment on account.

Can you reduce how much you pay?

If you think your taxable income will reduce for the following year you are able to apply to reduce your payments on account.  They can be reduced through your tax return or via an HMRC online account by either your agent or yourself.  Payments on account cannot be reduced by too much as if your tax liability is higher than the reduced amounts when your actual tax return for the year is complete HMRC will charge interest for the underpayments and potentially penalties.

If you have collated your information for the year prior to the July second payment on account deadline the filing of the actual tax return can replace the estimated tax due if the tax liability for the year is lower than the prior year.

New to self assessment? – watch out

If you are new to self assessment or have never paid payments on account before it’s worth putting money aside throughout the year so that you don’t get caught out.  This is because the first time you become part of the payment on account regime you could have to pay 150% of the tax liability in January.  This would be 100% of the tax from the prior tax return and 50% again for the following tax return. This first experience can feel like a shock, but it will make the next payment in the following January easier.  This is because you would have already paid 100% of the prior year’s tax to deduct from the total.

How to pay

Simply log in to your government gateway and follow the instructions. Alternatively you can pay by phone, bank transfer or a number of other different way. The details of this will be on the letter you receive from HMRC, or on the HMRC payment guidance online.

We hope this helps clear up some of the questions regarding payments on account. Your government gateway account will always show your upcoming payments so we really do recommend setting one up. If you have any other questions regarding payments on account just give us a call and we will be happy to help.