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Is An Accountant Required To Submit Your Tax Return?

Most often, it is fair to say that most business owners are not confident when it comes to deciding which aspects of their tax duties they can deal with themselves and when they can be at an advantage from calling in a professional. Some would argue that giving the job to an accountant is a much easier option. However, there is now clever technology that can boost your confidence when organising your taxes on your own. 

How does self tax assessment work?

Self-assessment tax returns declare how much taxable income you have earned in that financial year and determines any expenses you may be qualified to claim. 

The digital tax initiative, which is slowly being introduced, means that annual returns will be replaced with quarterly reports. 

Tax returns depend upon close attention to detail, making sure to provide exact dates, figures and details of any marital and special relief privileges you might be eligible for. Business owners should always be willing to support their claims with sufficient evidence such as invoices or receipts if requested to do so. If you submit false information you may be charged with a hefty penalty, this would be the same if you were to miss a filing deadline. The longer you take to amend the complication, the more your fine is likely to grow. 

Other tax filing options

Sadly, some small businesses simply do not have the money to spare to hire an accountant; however, it’s essential to keep your returns free from errors. Human error is a genuine but leading issue in incorrect returns, and if they were to make a mistake, your business would be liable. Many people shy away from completing their tax returns due to the added pressure it brings.

An alternative method is to invest in a tax software (for example Quickbooks) that keeps track of your income and expenses throughout the financial year. Providing you input your figures carefully, the calculations should be error-free! On the other hand, spreadsheets, calculators and good book-keeping can help you be your own accountant. Although it may not be as simple as tax software, it is undoubtedly attainable if you have a good head for numbers!

How can a tax account be useful? 

Business accountants deal with numbers daily, therefore, are ideal for protecting your figures. More so, they know the conduct; what you are and are not entitled to claim and how you can cut your liabilities. Employing an accountant not only saves bundles of stress but also a lot of time, it is typically around £150 for a reputable firm, often a little less if you only require a basic service. The price may seem quite reasonable to a business who may on average spend several hours completing their own tax return. 

If you feel like you could benefit from having an accountant, don’t hesitate to get in contact!

Accountants Face Exceptional Challenges For The End Of 2020 And Beyond

With the COVID-19 pandemic causing more uncertainty and disruption, this has led to an increase in challenges in auditing financial statements for accountants. Not only this, but extra difficulties have come to light with regards to Brexit and the transition period finishing on 31st December 2020. Not only this, but climate change has become another important topic of 2020 as well as COVID-19 and Brexit.

These three key issues are predicted to alter areas of financial statements. This is because investors will want to gain information that will clearly explain how directors of businesses have responded to their implications. Transparency will be vital for this to occur.

Directors will also be obliged to review every area of every financial statement, which will be subject to judgement and estimation uncertainty. Furthermore, forecasting will also play a vital part in conducting impairment as well as concern reviews. The uncertainty of all this could require help from other sources.

Soon auditors will have to demonstrate levels of professional scepticism. This increased uncertainty amongst financial professionals will mean that they will need to take an approach that involves seeking good-quality corroborative evidence as well as evidence derived from different sources.

Those preparing annual reports are urged to commence the planning early due to the challenges in the upcoming reporting season. There must be a focus on transparency and engagement across organisations to gather information with auditors. It is also important to think about the reporting deadlines and making their scope as flexible as possible because of the extraordinary challenges that will be occurring for auditors and preparers. These challenges will not only be affecting their professional lives, but COVID-19, Brexit and the climate crisis will affect the personal lives of auditors too.

The key lessons that we can learn in preparation for this are to be as organised and flexible as possible to meet these deadlines. Preparing for the worst financial scenarios due to the three key challenges will also be important in ensuring no more challenges will arise from the ones already established.

The Institute of Chartered Accountants in England and Wales (ICAEW) provides lots of relevant resources and will be able to develop these resources to the changes which are occurring at the end of 2020. They offer technical support with regards to the COVID-19 situation with information for auditors and preparers free of charge.

Take a look at my blog here to see how some UK accountants are voicing their concerns about their environmental worries.

Accountants Considered ‘Key Workers’ According To Firms Due To The Pandemic

According to a study by Xero, the importance of accountancy has been emphasised due to the COVID-19 pandemic. Many small to medium-sized enterprises are now considering them as key workers in the UK’s economic recovery.

Xero recorded that 43% of small business owners said that their company’s accountant was an essential part of the company’s survival during the pandemic, with an impressive 63% saying their accountant delivered an unquestionable high standard of service. A further 37% of business owners suggested that their accountant enabled them to retain their members of staff during the most tumultuous time of lockdown.

In addition to this, a lot of small to medium-sized enterprises also highlighted how vital technology has been for their company’s financial development during the pandemic. It has been a driving force in keeping the businesses thriving during the worst part of the epidemic in particular. Almost half of the business owners questioned in Xero’s survey said that the cloud and its technology had been large support that has enabled staff to work from home with the company’s accountant, safely and remotely.

Saving data to the cloud has been one of the changes accountants have been making to their way of working due to the Coronavirus pandemic, as well as businesses alone. 

Many business owners went to government websites in order to seek resources at the beginning of the pandemic. Here, they were advised about cloud-based software to survive as a business. Without this ground-breaking technology, many companies would have risked a huge financial loss. Now, 45% of companies have said that their accountant is more important than it has ever been. 14% had contacted their accountant for the very first time due to the pandemic and 38% have said that they have a better relationship with their accountant than before the pandemic even began. 

Accountants have been particularly useful in providing help and support in areas such as VAT, tax returns and payrolls.

The fast-growing cloud software has been an invaluable source for small businesses surviving financially during the pandemic. It is now shaping the accounting landscape and how companies manage their finances with accountants remotely.

Accountants play an essential role in transforming small firms, and in relation to the pandemic, saving them from financial chaos. 

Remote Working Continues For Accountants Seven Months Into The Pandemic

The shared experience of working in the office vanished when the COVID-19 pandemic hit the UK. The feeling of company and teamwork in a space disappeared along with this and challenges soon arose for businesses trying to keep things running smoothly and remotely.

Some businesses coped better than others. Ones which were more used to removing sensitive financial data from the office were better equipped at working remotely. These organisations have been laying the groundwork for years of being able to balance the books from the comfort of their homes, so the pandemic was a good opportunity to put this into practice.

These businesses had worked to gain a continuous accounting process. This automates routine accounting tasks that require complicated calculations such as depreciation and amortisation. Therefore, these processes become continuous because of how automated they are. This automates the generation of financial statements, transfers with eliminations and reconciliation tools including AP sub-ledgers and the general ledger. Technology is an efficient way to process transactions for accountants and counteracts the complexities that come with working remotely.

The goal is for these automated processes to happen continuously. The pandemic has focussed on a need for automatic technologies and has also highlighted the importance of the cloud in doing so. The cloud allows sensitive financial information to be stored securely. This could involve data privacy as well as internal permissions when accountants are outside of the office.

Cloud-based technologies are updated regularly in line with the newest standards and regulations which often change. The cloud is kept modern and running smoothly. This maintains compliance for organisations.

With automated systems, there is increased accuracy. There is no need to rekey information from system to system manually. This reduces the chance of human data entry errors, so saves time that can be dedicated to other internal operations within the businesses. It also increases the quality of work-life for employees when functions are automated and left to the end of the month. The most tedious work has become more automated.

In conclusion, although remote working continues for accountants seven months into the pandemic, there have been advantages that have come with it. These advantages mentioned above have sped up the work of accountants by saving them time and removing more tedious aspects to complete. Accuracy has increased and the overall move to automation couldn’t have come at a better time for accountants.

If you need any help with your accounting needs, get in contact today.

UK Accountants Voice Their Environmental Worries About Businesses’ Approach To A “Sustainable Recovery”

The Global survey of accountants this year has unearthed accountants’ disappointment of businesses environmental as well as social strategies. These accountants and financial experts support the move to a “sustainable recovery” but fear that businesses are only escalating negative environmental/social impacts.

The survey was part of a report by the Association of Chartered Certified Accountants (ACCA). It was titled “Mainstreaming Impact: scaling a sustainable recovery“.

In its research, it asked 829 accountants and finance experts around the world about the environmental progress and performance among the organisations they work for.

It was recorded that 90% of those questioned were not happy with the current environmental and social sustainability efforts carried out by their organisation. The accountants said that they want to see their organisations increase all their efforts to become more sustainable, and in doing so, create positive societal change post-pandemic.

One in 20 of the accountants and financial professionals surveyed said that finance teams did have an essential role in contributing to a “more socially inclusive and environmentally sustainable future”.

75% of respondents mentioned that the business they currently work for needs to target the social inequalities which still exist to this day. This could be through wealth, race, sexuality, sexual orientation, religion and gender.

However, an additional 10% to this said that businesses need to make more efforts in curbing the environmental damage, a forefront topic of 2020 behind the global pandemic.

A worrying statistic showed that only 54% of respondents believed that they had the training and skills that were vital to combat the environmental and social change in the business they are employed by.

Many of those surveyed highlighted the barriers businesses face to environmental and social improvements. For example, the cost implications, a narrow focus on returns and a lack of senior management.

Helen Brand, chief executive of ACCA stressed that accountants have “a huge role” to play in environmental performance improvements. She added that this was “because it’s through professional education that accountants can support the transition to a net-zero carbon world.”

Head of sustainability at ACCA, Jimmy Greer said that “Professional accountants and finance teams are central actors, with the skills, knowledge and ambition to do more” and that businesses “need to make board level governance commitment to additional and intentional social and environmental positive impact creation.”

Greer finished by saying that businesses “must allocate resources within finance teams and across organisations to build decision-making capabilities related to environmental and social impact.”

If you need any help with your accounting needs, get in contact with us today.

Five Reasons Why You Need an Accountant

Managing your finances is not for everyone. It can become very complicated and dreary and detract from the time and passion you put into your own business with the wasted hours filing tax returns. Whether you are just starting out or running a top company with the aim to expand, an accountant can be a big help. Here are five reasons as to why you need an accountant!

Saves Time

Having your own business begins with the idea that you are passionate about. This excitement doesn’t tend to include the hours spent going through your finances and paying taxes. Accountants are paid for doing the financial work you don’t want to do. They will allow you to save time to focus on your business. You get to spend time making money and not having to crunch numbers.

You are still legally responsible for an accountant’s accuracy, but you can hand over full account management to them. Your accountant can do virtually everything on your behalf, saving you so much time. They can do things like complete tax returns, manage PAYE and more. They can even be the ones who communicate with HMRC

Organisation

Deadlines for tax can change regularly. This can be a stressful ordeal, and getting a foot out of line could lead you to underestimate your future tax bills. An accountant is organised and knowledgeable on all things financial. They can guarantee that deadlines will be met, and you will be paying the correct amount of tax at the right times. Having an accountant will be a useful safety net to ensure nothing goes wrong and will keep all your numbers organised and tidy.

Save Money

Hiring an accountant is not as expensive as you might think. Good accountants can address areas where you could save money. This could be through claiming entitled expenses. This would cut your tax bill considerably and might mean that in the long run, your accountant will be paying their own fee through the money they saved for you!

Support and Advice

Not only are accountants there to help with your finances but having their support can really improve your whole businesses’ setup. If it’s a new business and you’re inexperienced, they can be there to look over your plans and goals. As you grow and expand, they can show you your options and direct you in ways dependant on your business’s structure

Makes life simple

Working with figures and finances is not everyone’s cup of tea. Hiring an accountant is a good idea if you dread the thought of seeing spreadsheets, invoices, and tax returns. You can sit back, relax and concentrate on your business and make money while your accountant does the work you don’t wish to spend your weekends doing. Life will be pure bliss, and you have the added knowledge that you won’t be penalised for late payments!