Key things accountancy firms need to know about your finances

For many, hiring an accountant is not a luxury, it’s a business necessity. The majority of business owners don’t have the spare time to become tax experts and mistakes can be costly. Hiring an accountant will ensure your accounts are managed properly and that any paperwork is filed with the tax authorities on time. They may also provide invaluable business advice and support.

From assets to liabilities, we attempt to demystify the jargon around accountant firms, so you know exactly what to provide when organising your finances.

To minimise your tax liability, you’ll need to provide your accountant with the right information and documents in advance. Typically, you will need to provide them with:

Details of your business

When you engage with an accountant they will ask for details relating to your business. As well as asking the date when the company started trading, they will also need to know the set-up of the business i.e. are you a sole trader, partnership or a limited company.

If you’re a sole trader or partnership, they will need to know the trading name and address of the business. If you are operating as a limited company, they will need to see details of the company’s incorporation and they will require details of the company’s director and shareholders.

If you looking to seek the support of an accountant for your business, as a firm of UK Chartered Accountants who help thousands of businesses and individuals in and around Lincoln, Gainsborough, Newark, Retford, Sleaford and London, we are well placed to advise and manage your accounts, tax and advisory needs.

A breakdown of your income

As well as the income you make from your business, an accountant will need to know the details of any other taxable income you receive. Taxable income includes things like; bereavement allowance, carers allowance, state pensions, employment income, commission you earn from sales, redundancy or leaving payments over £30,000, tips, rental income, and statutory sick, paternity, maternity or adoption pay.

You are legally required to submit details of all your taxable income on your self-assessment tax return. You will face penalties if it is concluded that you lied to HMRC about your taxable income.

Proof of expenses

Costs that are related to the running of the business are classed as an ‘allowable business expense’. For expenses that include an element of personal use, it may be possible to claim a proportion of this as a business expense.

It is advisable to get advice from an accountant to understand what expenses you can claim for, but typically it will include; marketing costs, office expenses, training costs – as long as it is for ongoing training and development, accountancy fees – in relation to the preparation of the business accounts, subsistence – food and drink costs whilst on a business trip and travel costs.

All claims for expenses must be accompanied with a corresponding receipt of proof of purchase. It’s important that you keep your receipts organised and in a safe place. You may wish to consider using cloud accounting software which allows the upload of receipts into the system using a mobile app. This significantly reduces the chances of receipts getting misplaced or damaged.

A list of liabilities and assets

The accountant will need to know details of any liabilities the business has. A liability is deemed as an obligation which the business has to pay. Liabilities relating to the business include; loans, wages payable, taxes and trade creditors. An accountant will also need details of assets, such as a list of debtors and loans made by the business to other parties.

Your plans

The accountant will be interested in your plans for the business including capital expenditure. As well as offering business advice there are tax allowances which may be able to be claimed.

When you engage with an accountant, hopefully it will be a relationship that proves to be fruitful for the foreseeable future. In order to provide you with the best advice possible, you will need to provide the accountant with accurate and up to date information on the financial standing of your business. Wright Vigar have a strong reputation for helping businesses across several sectors with their accounting and taxation affairs.

If you would like to arrange a free initial consultation, get in touch with us on 0845 880 5678 or email website@wrightvigar.co.uk.