When you run your own business in London it is difficult to keep track of all the things you have to do. Owning a business is tough, particularly in the London area where there is a lot of competition from other entrepreneurs, and where costs can be high. As a recent start-up in the capital, or a small business owner looking to expand and grow, do you need an accountant to handle your business finances, or can you do it yourself?
- Help with VAT
If you are a limited company and you are making a profit, you need to pay corporation tax on the profits as well as file a yearly tax return for the company. Once the turnover of your business hits £81,000 it is important to register for VAT with HMRC and you will need to submit your VAT return every quarter. VAT is, on the surface, simple as you need to charge VAT on goods and services you provide but you can claim back VAT on things that you purchase for the company. But it is complicated because some goods and services are tax exempt while others benefit from a reduced rate of VAT. You can also choose from different VAT schemes. An accountant can help you deal with the practicalities of setting up VAT and ensuring your returns are accurate. You can do it yourself, but you do need a good grasp of finance and be confident with the latest legislation in order to make sure you are getting it right.
- Reduce Your Tax Bill
Probably the task accountants are most known for is reducing the tax bill of a company or an individual. When done effectively, an accountant is worth their weight in gold as they can tell you what tax relief is available, and how you can make best use of tax deduction schemes. Professional advice from accountants in central London helps a small company in London make use of tax incentives such as corporation tax deduction up to 225pc on eligible R&D expenditure.
- Assistance with Corporation Tax
For corporation tax HMRC’s software only deals with the most basic of submissions and it is usually necessary for companies to hire an accountant who can use specialist software to submit the corporation tax returns. You could also purchase this software yourself and use it in-house but, again, someone in your company does need to have a good grasp of finance and tax.
- Help to Stay Compliant
It is vitally important that you submit your tax returns on time and make any payments due on time. If you don’t do this you risk penalty notices and you could find yourself in legal trouble. If you make mistakes then HMRC will look to see if it is deliberate fix or a careless error, but will charge penalties in both cases. Consulting with accountants in central London helps avoid the possibility of large fines. With a high risk of getting something wrong, it is important to know you are doing the right thing and handling your company’s finances to the best of your ability.