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Find answers to our most frequently asked questions. Learn more about accountancy, our services, and how we can help you.

Q: How easy is it to change accountants?

A: Really easy! If you’d like to move your services over, you just need to let your current accountant know you’re moving and give permission for your records to be passed to us. We take it from there, liaising with your previous accountant to get the information we need. This should be a very smooth process.

Q: How are your fees structured?

A: We will assess the level of work required and the combination of services we can offer. We provide an annual fee, which can then be broken down into a monthly direct debit to help you with cashflow.

Q: Will I be in a contract with you?

A: No, we don’t tie you in. There’s no obligation to work with us and we only ever charge you for work we have performed. Our clients stay with us because they want to, not because a contract says they have to.

Q: What is the VAT registration threshold?

A: Businesses with a turnover of more than £85,000 per annum must register if they provide a service or sell goods that are subject to value-added tax (VAT). This threshold is assessed at the end of each month for the year to date.

Q: How does VAT work?

A: If you are VAT registered, you charge VAT to your customers (currently 20% of the invoice total). Every three months, you calculate how much VAT you have received or invoiced and how much VAT you have paid as part of your expenses. Any difference between the two is paid to Her Majesty’s Revenue and Customs (HMRC) one month and seven days after the end of the quarter. There are several different schemes you can use and we will assess the best one for you when you register. Things do change, so we can move you to a better scheme if a different option is better in future.

Q: Do I need to set up a limited company?

A: Not necessarily – it depends on the level of profit you will make and any other income you have as an individual. There are considerations beyond tax implications too, such as the limited liability protection that a company provides to its shareholders. We can help you examine the pros and cons and make the right decision.

Q: Do I need a company bank account?

There is no rule to say that you must, but it’s a sensible step to take. Any money taken from the company by a shareholder (who is also usually a director) is taxable for the shareholder/director. If there is no company bank account, this would mean a tax charge every time the shareholder/director receives payment for a sales invoice into their personal bank account. There is no scope for tax planning, plus the timing of payments to shareholders is very important and without control over this, there would be extra tax to pay.

Q: What can I claim for as a limited company?

A: Anything business related. The general rule is that it must be wholly and exclusively for the use of the business. There are some expenses that need extra consideration, such as cars (company cars increase tax charges for the employee, unless the car is electric).
Anything that is spent in order to generate income is allowable. Typical expenses include insurance, telephones, IT, advertising, cost of sales (materials etc.) and distribution costs.

Q: When is corporation tax due?

A: Corporation tax is paid to HMRC nine months and one day after your accounting period ends. For example, if your year-end is the 31st March, your corporation tax would be payable on 1st January the following year.

Contact Adams Accountancy

Let’s talk about your finances. Adams Accountancy is here for your business. Call 01322 250 001 or email info@adams-accountancy.co.uk