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Xero Training for Business Owners | A Comprehensive Course

By Jayne Waugh

For business owners big or small, Xero is the software of choice for advanced, yet easy accounts management and making tax digital.

Xero gives you an insight into how your business is performing, future performance metrics, payment scheduling and improved time management.

Here at Northern Accountants, we provide classroom or remote Xero Training for your teams, or for independent business owners.

You’ll also be happy to know that we’re a Xero Platinum Partner. 

This means you’ll get all the attention and professional training you or your team require.

Our mission is to help as many businesses to become more confident using Xero. Freeing up more time to grow your business and live the ideal work-life balance.

Why choose Xero?

computer screen with a Xero logon on the front with a question mark on the side

Accounting software can be a valuable asset to your business, automating many of the functions that would otherwise take you time.

If you are a beginner in using a cloud-based accounting system, then this platform is for you. Xero allows for easy navigation for non-expert users.

Xero is one of the accounting software giants.  This will help your business manage your cash flow, taxes, without going through the trouble of manual data entry.

With a combination of functionality, easy interface, valuable features and intelligent automation, Xero is second to none.

Xero’s cloud enablement means that you can use Xero online on a variety of mobile devices. This includes your smartphone, laptop, tablet, or PC. This essentially means that you can have access to your financials anywhere. Again, this is really helpful if you’re travelling for work and suddenly find yourself needing important financial data which you don’t have to hand.

How our Xero Training is Structured?

As part of your onboarding meeting, we will determine exactly what length of training you require. This includes if you require any additional support, which we’re always happy to help you with.

Moving Accounts

Before we can get you started with your Xero training, we’ll first move your accounts over from your current accounting system. This is all done by our team prior to your training session.

You’ll then be converted to Xero from your previous accounting system. Again, this switch-over is carried out prior to your training.

If you’re a brand new company, the Xero set-up is straight forward, and it’s also carried out prior to your training.

Training Guidelines

Once we’ve set up Xero for you, we’ll work with you prior to the training, where we’ll outline what we’ll be covering in the upcoming sessions.

The training is currently done remotely via google hangouts where we share screens and data. Or, if you prefer classroom training, and if we’re not restricted by COVID-19, we can do in-house training where all the appropriate safety measure will be covered.

Then, after your initial setup and consultation, you’ll be contacted prior to the training with a list of items which are required to bring along with you to the training. These may include a

How long does our Xero Training last?

As the training is structured around your own circumstances and your understanding of Xero, will determine how much training you actually require.

Support will always be given after the training sessions until you feel confident in using the software efficiently. This can be carried out over the telephone, email, or a simple short video to resolve any questions you may have.

What’s inside our Xero Training?

After your training, you’ll have gained detailed knowledge of Xero. So much so that you’ll be able to run your internal finance function smoothly and efficiently.

As for structure… We split the sessions into shorter segments. Furthermore, we can break them down even further and work on the key areas that you’re most interested in.  This way you will learn more effectively.

As a bonus, we’ll also design homework for your specif needs. This will be given after each session – helping you to prepare for ready for your next training session!

If there are any other processes within your business needs, we can assist you in integrating and implementing the appropriate app that works well with Xero.

We will show you how to get the most out of the Xero platform

By the end of the training session, you will have confidence in using the software. And we’re positive you’ll love using this ingenious software that is Xero.

How much does our Xero Training cost?

The cost all depends on the level of training you require. Including, whether you require a transfer of data from other accounting software.

This can be discussed in more detail with one of our Xero advisors.

What Next?

If you are ready to move to the Cloud and streamline your internal accounting function, then please contact one of our Xero advisors. We will be happy to discuss your training needs further. Please telephone  – 0113 218 955 or email savetax@northernaccountants.co.uk

As a Xero Gold Partner, we can guarantee a smooth transition to the cloud!

Cloud Accounting Software | Your Frequently Asked Questions

By James Harrison As a business owner, have you ever held a meeting in your office, where you’ve had to apologies for the knee-high stack of documents on your table from your accountant?

Have you ever thought…

“Is all this paperwork necessary for my accounts? Isn’t there an easier way to manage the endless stream of receipts and invoices to comply with accounting standards?”

Continue reading to find out how Cloud Accounting can transform the way your company operates. I’ll also dive into your most frequently asked questions, and the best software currently available for making tax digital (MTD).

Cloud Accounting Benefits?

a computer screen showing a green tick with a cloud, highlighting the benefits of cloud based accounting software
Benefits to Cloud-Bases Accounting Software

Cloud accounting software allows you to digitalise your business by making all of your accounting activity available at the touch of a button.

It also allows you to project your current financial position, make payments, and future proof your success – by giving you the ability to scenario plan if anything were to change.

Furthermore, and potentially the main benefit to cloud accounting, is the way it allows you to operate from almost anywhere in the world.

This is, however, as long as you have a working computer and a stable internet connection.

All of this, in turn, allows for any business owner to access their current information day or night – which has transformed the way thousands of businesses operate.

Features and benefits when using Cloud Accounting: 

  • Access anywhere in the world with an internet connection
  • Get real-time information
  • Make bulk payments
  • Schedule supplier payments, invoices and wages
  • Forcast your future finances
  • Scenario plan for possible changes in your market or business

Cloud Accounting Downsides?

a computer screen showing a green tick with a cloud, highlighting the downsides of cloud based accounting software
Downsides to Cloud-Bases Accounting Software

Although your accounts can be managed from the anywhere in the world. Cloud Accounting software may not be fully utilised to its full potential.

This may be due to a lack of understanding of how the software operates. Or of an incorrect initial set-up of your cloud-based software, or even in the way that not all accounting software is created equal.

Therefore, here at Northern Accountants, we’ve specialised in software that’s tried and tested to work time-and-time again, giving you full control from start to finish – such as Xero (more on this below).

By doing this, it has allowed the people we work with to concentrate on what they do best, which is to manage how their business operates, instead of chasing paperwork.

Long story short, the digital revolution is greatly impacting the tools at disposal for modern accountants. This includes giving the availability to access the overall financial health for your business – not just money-in vs money-out.

This means the traditional stereotype of an accountant sat in a dark corner of a room buried in receipts and invoices has almost become extinct.

How does cloud-based accounting work?

cloud based accounting software logoCloud accounting software is managed and stored through external servers or “The Cloud”. The software is used in a very similar way as you would use your emails. It can be easily accessed through a secure login on the web or an application.

The data held on the cloud is kept at real-time, allowing for the information to be constantly up-to-date.

As the software can be securely accessibly from anywhere in the world, this allows for the flexibility for multiple users. Such as you, the business owner, and the accountant to both access the same data at the same time.

All data is securely stored through an external server, This means that business owners aren’t required to replace their mountain of paperwork for a room full of computer equipment.

As a result of this software, costs usually run on a subscription basis. Allowing business owners to keep the money where it belongs.

So, What’s the Best Cloud Accounting Software?

As we are constantly moving towards a more digitalised world, it can become overwhelming the amount of choice we have as consumers of products and services.

Clouding Accounting software is no different.

The software that is currently offered aims to give you, the user, full control over your accounts from anywhere in the world.

a computer screen with Xero on the front
Xero – A Highly Comprehensive Cloud Accounting Software for MTD

Xero

Xero currently prides itself in being easy to use, and accessible for SME businesses.

Here at Northern Accountants, we are Xero platinum partnered. This means we’re registered to offer Xero Training and full software support. From on-boarding, to the full management of your accounts using this ingenious software.

So why is Xero so good?

Building a business and projecting growth can be nearly an impossible task to predict. Such as, if your business goes from a local hairdressing salon to an international franchise overnight. This is where Xero shines.

Xero allows you to project growth or any variables for that matter which might affect your accounts. In summary, it allows you to future proof your success, big or small, among other benefits.

Multiple Factions and Add-Ons

Furthermore, to assist with the day-to-day running of your business, Xero is currently partnered with hundreds of other software providers that complement your business.

Receipt Bank, for example, is one of these partners which allows documents to be scanned from a smart device, straight into Xero.

This allows you to easily transfer physical paperwork onto the cloud, making tax digital. Read more on our Cloud Accounting Services here.

Another example is Chaser – which integrates the receivables into Xero. This ensures that your, or other companies you trade with are paid on time.

Xero has also launched a “Xero Advisor” Certification. This allows for business owners to identify financial professionals who have been certified to use the software and skills offered by Xero in a compliant and sufficient manner.

You can see that here at Northern Accountants, we are Platinum Xero Partnered – Xero.com Platinum Partner Northern Accountants

QuickBooks

Quickbooks’ easy to use interface allows for small businesses to handle their basic accounting needs. And while it’s not as robust as Xero, we still believe it’s worth a mention as some people may prefer its interface.

Financial reports can easily be generated, giving informative and timely data to you as the business owner.

Furthermore, applications on the App allow you to upload invoices and receipts through a click of a button.

Quickbooks Merchant account services also allow of businesses to sync credit cards (which are integrated into your QuickBooks software) which makes payments that much quicker. Read more on QuickBooks.com Credit Card Payments here.

Making Tax Digital – MTD, and Accounting Software

From 2018/19, both Xero and Quickbooks became government compliant, to allow for making tax digital (MTD).

This means you can now submit your VAT returns through the accounting software digitally, while still complying with government accounting standards.

So, what’s all the hype about MTD?

Apart from being compliant with Gov guidelines, it allows you to keep on top of your tax figures and plan for future payments through your business.

For more information on Xero, or preferred software of choice for business owners, please don’t hesitate to contact our team to discuss your options.

What Next?

Here at Northern Accountants, we believe in positively adapting to the inevitable changes that are now being enforced by our government for MTD.

To keep up with these changes, we strongly recommend using Xero. It’s by far the most comprehensive software available for managing your business accounts, payments, and forecasting.

So where does this leave us?

The digital revolution is greatly impacting the tools at disposal for modern accountants, and the availability to easily access the overall financial health for any business owner.

As a result, the traditional stereotype of an accountant sat in a dark corner of a room buried in receipts and invoices has almost become extinct.

Have you joined the digital revolution?

Self Assessment for Joiners | a Step-by-Step Guide

By Tyler Boston

Filing a self-assessment tax return online as a joiner has never been easier. The HMRC has made it so skilled construction workers can file tax returns in just a few simple clicks.

Therefore, if you’re working for an employer with additional part-time, self-employed work on the side. Or if you’re a full-time sole trader looking to file your self-assessment tax return for the first time – this guide is for you.

In this step-by-step guide, I’ll run through how to use the HMRC self-assessment website. I’ll also highlight some clever ways you can save yourself tax on work expenses.

Continue reading to learn how to set-up and file your self-assessment tax return:

How to sign up for self-assessment on the HMRC website?

Before you sign up for online self-assessment, you’ll need to register on the HMRC website. You can do that here – Gov.uk HMRC Register for Self Assessment

register for self assessment tax return gov.uk screen northern accountants
GOV.UK Website landing page for Self Assessment Registration 

After you’ve made your registration, you’ll be sent your Unique Taxpayer Reference (UTR). The UTR is unique to you. This is what the HMRC uses to store your personal tax details.

Once you have your UTR, you can then set up your Government Gateway account.

Setting up a Government Gateway account involves choosing a password, a unique reference number.

At this point, you’ll be able to log into your online gateway account to file your self-assessment and claim for expenses – and make pension and NI payments.

If you need help getting set up, we’ll be happy to help. Just call our office on 0113 218 9552

What Expenses can I put through my Self Assessment Tax Return as a Joiner?

As a joiner, there are many different expenses you can put through your self-assessment tax return.

Below is a breakdown of the different types of expenses you can put through as a Joiner.

1 – Materials used for work
2 – Workwear
3 – Business Travel expenses. For example, fuel and public transport.
4 – Subsistence allowance. For example, if you have to eat out when working away etc.
5 – Tools used for work
6 – Public liability insurance

The amounts of expenses you can claim will differ for each category. Such as materials, workwear, and business travel.

For example, the amount you can claim for mileage compared to using rail or public transport differs slightly. It’s 45p per mile when using your own vehicle, yet you can claim the full amount when using public transport.

TOP TIP: Did you know that if your work van is out of service for whatever reason (repairs or a breakdown) – you can offset the full cost of the van rental for work against your tax bill, reducing your yearly tax.

If you would like more detailed information on the type of expenses you can claim, please send an email to savetax@northernaccountants.co.uk. Or call our offices on 0113 218 9552.

Deadlines for filing a Self Assessment Tax Return

The deadlines for filing tax returns depends on how you file it and which tax year you file it in. Below is an example of filing dates for the tax year 2019/2020.

  • Paper returns: 31st October 2020
  • Online Returns: 31st January 2021

For paying your tax return the deadline for this date is the 31st January 2021.

Late filing/payment penalties

You will get a penalty if you are late paying or filing your tax return.

If you are 3 months late filing your tax return, you will be fined £100. However, this will be more if it is later than that.

You will also be charged interest on any late payment or filing penalties – the longer you leave it the more it will be.

However, these penalties can be appealed if there is a reasonable excuse. To find out what is accepted as a reasonable excuse please see the Gov.uk HMRC website – Reasonable Excuses.

How and when to pay my Self Assessment Tax Return?

Paying your Self Assessment bill is made simple and can be done in 3 different ways.

1st Option

You can either pay online by debit, or credit card using this link to the government website here: Gov.uk Pay your self-assessment tax bill

When using this link, you’ll need to select the ‘Pay by Debit’ or ‘Credit Card’ options and follow the steps through the link. To do this, you’ll need your Personal UTR to make this payment.

2nd Option

You can also pay by bank transfer by visiting your online banking. The back of the payslip sent by HMRC will have the account details you need to pay your bill to.

However, if you do not have this payslip, then you can pay this to HMRC Cumbernauld (their default address). The bank details of this account are shown in the link stated above and by clicking on Bank details for online or telephone banking, CHAPS, Bacs.

3rd Option

You can also pay your Self-assessment tax bill by Cheque through the post. To do this you’ll need to state your Personal UTR number on the back of the cheque, followed by a K at the end.

This will be your paying reference, and if this is not stated correctly, or not stated at all, there will be a delay in paying your tax bill – which could lead to a late payment penalty.

The details you’ll need are:

Address: HMRC, Direct, BX5 5BD.

What’s Next?

To recap, you’ll first need to sign up for your UTR number.

Then, once you have your UTR number (which could take several weeks to arrive), you’ll then be able to set up your government gateway account.

Once in your government gateway account, follow the steps, adding in your personal details, expenses, and earnings. Then, the government gateway will automatically calculate your tax and NI that you’ll need to pay.

If you need help filing or setting up your account, please don’t hesitate to contact us here at Northern Accountants.

What Are Benefits in Kind? and Do They Affect You or Your Business?

By Shaun Lindley

For employers and their employees, benefits in kind are often a minefield and can be costly if ignored, or not taken seriously.

To explain, benefits in kind are, as the name suggests, benefits which the employee receives over and above their usual salary.

This applies to company directors too. Previously, benefits will not have been reported to HMRC through your payroll system. However, they do need to be declared for each applicable tax year.

Northern Accountants are here to assist and support you through the process. Please read on to find out more about benefits in kind and how we can help you.

What types of benefits in kind are there?

There are quite a few, but here are the usual suspects…

Company car

Your employer may provide a company car to enable you to perform your duties effectively.

For example, where the car is used for private use, then a benefit in kind arises. And let’s be honest here – that is usually the case.

How much benefit can be claimed? The amount of benefit is calculated using the list price of the car and its CO2 emissions.

Company van

If you have use of a company van, where there is an element of private use and commuting, your employer will need to report this.

Also, there is an amount for the benefit of the van.

These are, for the 2020/21 tax year – £3,490. Furthermore, if fuel is provided, there is also a benefit for this which is £666 in the 2020/21 tax year.

Medical insurance

If your employer pays for medical insurance and you are covered on the policy this needs to be reported to HMRC as a benefit in kind.

Loans to employees & directors

If your employer provides beneficial loans, interest-free loans or where interest is charged below the HMRC guidelines (and if you are a company director this includes you too) a benefit in kind arises and should be reported.

By no means is this a complete list. Here is a link to HMRC’s website for the exhaustive list of benefits in kind for you to take a look at, Gov.uk Expenses and Benefits.

How much do you have to pay HMRC?

So, how much do you have to pay HMRC, and what are the costs associated with benefits in kind?

As an employee, you will usually see your tax code adjusted to reflect the perceived value of the benefit in kind.

If you are the employer, you (i.e. the business) will have to pay Class 1A NIC on the value of the benefits in kind. This is calculated at 13.8% on the total benefits.

Benefits in Kind Costs Example

David is an employee, and he has use of a company car. This is used privately, where the car was available throughout the tax year.

The list price of the vehicle is £25,000, registered in 2019 and the employee did not make any contribution towards the vehicle costs.

The car runs on unleaded fuel and has a 1600cc engine with CO2 emissions of 159.

For the 2020/21 tax year the following benefits apply:

  • Car benefit charge £9,000
  • Car fuel benefit charge £8,676

Therefore, the total benefits on which Class 1A NIC is payable is £17,676 – this means that your employer will have to pay £2,439.29 in NIC.

As the employee, and if you are within the basic rate tax band, your additional tax liability will be (based upon the 2020/21 tax year).

  • Company car tax £1,800Company car fuel tax £1,735.20

If you are a higher rate taxpayer, then these increase to £3,600 and £3,470.40 respectively.

All things being equal, HMRC will amend your tax code to take account of these benefits. HMRC will normally post details of the new tax code to you and your employer.

How do you report benefits in kind to HMRC?

If you are the employee, you don’t need to do anything – your employer will deal with this for you. Therefore, your employer must submit a P11d Form for anyone receiving a benefit in kind.

This runs in line with the tax year, 5 April. The form must reach HMRC by 6 July, and your employer must pay any Class 1A NIC due by 19 July or 22 July, if the forms are filed electronically.

What Next?

How can Northern Accountants help you figure out whether you should report benefits in kind to HMRC? Here at Northern Accountants, we can help you identify the potential pitfalls and provide clear, no-nonsense support.

As our client, we would review your accounting and payroll records to ensure you comply with HMRC guidelines in relation to benefits in kind. If you would prefer us to complete and submit the relevant forms to HMRC. We can do this for you too.

How much does it cost for Northern Accountants to help you?

If you require assistance in preparing and submitting Forms P11d our fees start from as little as £96 + vat per employee.

For further information or an informal chat about the ins and outs of benefits in kind. Please contact us on 0113 218 9552. Or email payroll@northernaccountants.co.uk

Your Guide on VAT Registration for Businesses

By Robyn Jones

If you’re a business owner, and you’re looking for advice on whether you should be VAT registered or not. This guide will cover everything you need to know about VAT registration for businesses.

We’ll cover what VAT scheme is most suitable for your business, how to apply, the different VAT schemes available, and VAT payment deadlines – and how to do a VAT registration check.

Continue reading to learn more…

Should my business be registered for VAT?

There are two basic reasons for your company (or business) to become VAT registered with HMRC:

  1. You register voluntarily – if it is more beneficial for you to be VAT registered than not. More on this in just a second.
  2. You have reached the government turnover threshold and must register. The current threshold to become VAT registered is £85,000.

If your business has a Turnover of this amount or above. For any consecutive 12-month period. You’re obliged (in the U.K) to register for VAT and submit regular VAT returns.

This means, if you supply or purchase vatable goods or services, you must provide details of any tax deductions to the HMRC.

If your company has a turnover of below £85,000, you can still be registered for VAT. This is beneficial if you are looking to trade with larger VAT registered businesses. Why? This is because other businesses will be able to claim VAT on any vatable goods or services sold by yourself.

Another reason you may choose to voluntarily register for VAT is because the goods or services you sell are zero-rated – or exempt from VAT.

An example may be if you owned a business selling Aircraft repairs and maintenance. The business would not have to charge any VAT as this is a zero-rated supply.

However, you’d still be able to claim back any VAT on expenses where VAT has been charged – resulting in a refund from HMRC. RELATED: Why switching to Xero made VAT return much easier for busy surveyors

What different VAT schemes are there, and which are most suitable for my business?

Accrual Scheme:

The most common VAT scheme used by business owners to prepare and submit their VAT returns is the accrual or standard VAT scheme.

This scheme takes the VAT at 20% or 5% directly from the invoice or receipt the date of the invoice. This also includes the VAT on sales invoices, minus the VAT taken from any expense invoices that will be due to HMRC.

Cash Accounting Scheme

Another popular VAT scheme used for companies with in-frequent payments, or longer payment terms, is the cash accounting VAT scheme.

This scheme allows you to take the VAT from the date of payment which has either been received or made. This is very beneficial for cash-flow because it allows VAT payments (or rebates) to be calculated on a real-time basis. For example; With standard VAT, if you sold goods to David Smith for £10,000+ VAT, you would pay the VAT to HMRC based on the period you raised the invoice. Under the cash accounting scheme, the VAT relating to this invoice would only be payable when you received payment from David Smith.

To be eligible to enter this scheme, there are certain thresholds you must be above or below. For more information surrounding the different thresholds for entering the VAT cash accounting scheme, the HMRC have published a basic overview here: Gov.uk VAT Cash Accounting Scheme Eligibility

Annual Accounting Scheme

The Annual accounting scheme is not as commonly used as the above schemes. Most VAT registered businesses will submit returns to the Tax Office quarterly or monthly.

The VAT Annual Accounting scheme allows you to submit one return per year. However, you must still pay four instalments throughout the year based on a rough figure from previous years. With a final amount to make up any difference, if any.

To clarify; Advance payment towards the annual bill must be made either based on an estimate of the VAT that the HMRC thinks you’ll owe on previous returns.

Flat Rate Scheme

This scheme is used for smaller businesses who specialise in specific goods. Business types are given flat rate percentages directly from HMRC. The percentage of gross turnover is the amount paid to HMRC.

For example, the flat rate percentage for an advertising business is 11% for the current year.  If you were to invoice a customer £20 + VAT (£24). The flat-rate payment would be 11% of the £24, equalling £2.64.

For more information regarding this scheme, check the HMRC guidance by visiting their website: Gov.uk VAT Flat Rate Scheme. Alternitively, get advice from us here at Northern Accountants.

What are the deadlines for paying and submitting my VAT returns?

1. Deadlines

The most important deadline to submitting and paying your VAT bill on time is the 7th of the month. If you are submitting quarterly or monthly VAT returns, your payment and return submission will be due exactly one month and seven days after your VAT period.

If you are submitting a VAT return with the period ending the 31st of January 2020, your payment and filing deadline will be the 7th of March 2020.

2. Late Payments

Late submission and payment of your tax bill can result in fines from HMRC. On the other hand, if you are due or expecting a VAT refund from HMRC, there is no deadline to have received this by.

3. Refunds

You will be due a VAT rebate if your VAT input (expenses) are higher than your VAT output (sales). This means, that you’ve either had a higher amount of expenses, or you have zero rates or VAT exempt business sales. More information on zero-rated goods and services can be found on the official government website: Gov.uk VAT Business VAT Rates

4. Paying The HMRC

One simple way to pay the HMRC is to pay your VAT bill via direct debit. This means that HMRC will automatically take the amount you owe, close to, or just after the 7th of the month. Alternatively, you can make manual payments to HMRC through the Gov website. I have attached a link to their payment page here: Gov.uk Pay VAT

What’s Next?

Registering for VAT has become a much simpler process using the newly updated HMRC website.

Don’t forget, the VAT registration deadlines for payments and submissions will be 1 month and 7 days after your VAT period end date.

To avoid any late filing or payment fines, it is always best to keep your taxes in order.

If you need help in filing or calculating any VAT returns, we are more than happy to offer some friendly advice.

Northern Accountants (Leeds), Olympus House, 2 Howley Park Business Village, Pullan Way, Leeds, LS27 0BZ