Welcome to our Autumn newsletter. This quarter we interviewed a HMRC investigation expert who shared her tips with us. We also share some of our favourite software packages that can help you and your team save some time. Thanks for stopping by to read our newsletter.
COS Crew News
Tasnim gets her Xero Payroll certificate
Congratulations to staff member Tasnim on gaining her Xero payroll certificate. Keep up the great work!
Laura works hard at her AAT
Congratulations to one of our newest members, Laura, for passing her AAT Personal and Business Tax modules.
Win brings some normality back to networking
Staff member Win Edmondson runs a Business Networking group with her husband Simon. She has recently organised for them to go back to face to face meetings but in a safe environment following guidelines. They gave us a summary of how it went.
“The world of networking has had to change dramatically since March with no face to face meetings allowed.
Most events went online predominantly using the Zoom platform and some just sadly disappeared. At The Business Network South Manchester we re-created our popular lunch meetings virtually even getting some fantastic speakers for our pre-lunch seminars. The lunch tables became breakout rooms and the post lunch talks by members embraced screen sharing to promote their businesses.
Now there have been some relaxation in face to face business meetings we held our first event for six months at Cotton’s Hotel Knutsford.
Working closely with the hotel’s health and safety experts the event proceeded with members being asked to wear face masks throughout the hotel and all attendees were given a branded face mask to take away with them.
We were aware that there would be some members who did not want to attend for obvious reasons so we created a virtual meeting too and there were members on a large screen in the room who experienced the meeting via Zoom listening to the seminar and talks virtually .
Lunch was served to tables of four and the odd larger table of five within government guidelines where an exceptional two course meal was enjoyed
Although the meeting was supposed to finish at 2pm there were still members there an hour later simply enjoying sensible self-distanced networking.“
The Business Network South Manchester holds monthly lunch meetings as well as virtual drop in session for their members combined with many other benefits. For more details visit their website here.
6 Accounting Softwares that will save you and your team time
We all want to save time and money right? This is more important than ever with the way the world is currently. Many of us are working from home too and our old processes simply don’t work in our modern world, we have all had to adapt quickly. We’ve shared a list below of a few packages that have saved us time at COS or have saved our clients time. This list is by no means extensive so if you have a particular problem you need to solve regarding your finances then please get in touch. There’s a piece of tech for everything these days and we might just know the one that can help you.
Say goodbye to expense claim forms! Pleo is a pre-paid expenses card which enables you to give a card to your staff members to purchase items but in a controlled environment. You can top up the card with individual amounts, set limits, and monitor spending easily. When staff spend on a card it immediately notifies them in the app that they need to take a photo of their expense and pop it in the app along with a few quick and simple bits of information. The app syncs with your accounts software so you can see how much they are spending very quickly. We have some brilliant offers on Pleo, at the moment, so get in touch.
This software takes your bills, receipts and invoices and drops them into your accounting software but in a really intuitive way. One of our favourite features is the “invoice fetch” where you can link it to your shopping accounts and it grab invoices and receipts from them so they are all in one place. For instance, if you are billed monthly by EE for your mobile you can login to your EE account via Receipt Bank and it will pull your invoices into the software. This can save so much time trawling through emails! Receipt Bank has so many features. It may not be the cheapest but it’s worth it. We currently have some exceptional deals on this.
As accounting software goes, we’ll be honest, when Quickbooks was only on desktop we weren’t fans so we didn’t expect the online version to be any better. We were wrong! The online version is fantastic! We love it! Quickbooks Online has layers and layers of fantastic features and we are finding more features every day. We’ve started teaching Quickbooks too so that clients and bookkeepers can delve into the resources, tools and reports they need to really make the most of what it has to offer. It’s not the kind of software you can learn overnight but if you set it up correctly and get to grips with it, you could save so much time. It is worth it. It has more features than Xero but is still affordable. For our latest QBO deals, get in touch.
Xero has several apps within its range for different purposes. It is a one of the easiest accounting software packages to understand and provides great value in features. We have used Xero for many years and the majority of our clients use it, it’s a no-brainer that if you work in the industry you need to know how to use it or you’ll simply be missing out on a whole section of the market. Xero are good at taking away the lingo and keeping everything on the surface so that if you aren’t a bookkeeper you can still have a good stab at it. This doesn’t mean you shouldn’t get training though. Like any accounting software, if you don’t have the bookkeeping knowledge behind it you can make serious mistakes. Don’t be shy to ask for help if you are worried and want someone to look over it. We can help.
This is similar to Receipt Bank, but it’s owned by Xero and free for Xero users. It doesn’t offer as much as Receipt Bank but it’s a noteworthy tool that Xero users should make the most of. Like other OCR (Optical character recognition) software it brings your bills into your accounting package and saves you and your team time. It’s natural to be cautious of free products as naturally we devalue them or wonder “what’s the catch”. We believe Xero are simply forward thinking and wanted their own OCR software to compete with others in the industry. Who knows, in the future they could start charging for it so make the most of it whilst it’s free.
Xero Practice Manager
We use this at COS and it has made our team communication on projects much more efficient. We can set up projects and recurring jobs and assign them to team members. When the team tick off what they have done it informs the ‘Manager’ of that project so they can monitor where things are up to. We use the reports at staff meetings to recognise where the team needs support which has been more important than ever when working from home. Our team can’t simply turn round to ask their colleagues questions. This has also helped us to budget and to create accurate fixed fee calculations for clients. As you can probably guess it links with Xero so we can create bills and reports based on work we have performed.
Watch out for anything free
Although a free software may sound like a good idea at the time it could cost you time in the future. We have had experiences where a program or application has been free and then the developer has decided to simply shut it down or stop providing support and updates because it’s not financially viable. Free products are often funded via ads so it could result in spammy adverts and pop ups that could lead to unscrupulous websites. Please be cautious with anything free. Not all free products are bad, just ensure you have performed research before you download.
HMRC investigations: Your questions answered
Interview with Mala Kapacee of London Tax Network.
Q. I have filed incorrect tax returns, what do I do?
If you realise your tax returns are incorrect, you need to come forward and make a disclosure – it is a taxpayer’s responsibility to notify HMRC of their income – and there are a number of routes you can go down. The type of error will determine which disclosure route you choose. For example, if it was deliberate, it is probable a person will want protection from criminal prosecution, for smaller issues, it may be sufficient to write to your local compliance office. More importantly for most people, coming forward to declare an error without any prompting from HMRC (what we call an “unprompted disclosure”) is likely to attract lower penalties by virtue of being unprompted. Although not as serious as an investigation, an incomplete, insufficient or too much disclosure will likely attract more questions and scrutiny by HMRC rather than a straightforward acceptance. Ensure that you are assisted by a qualified professional who knows what needs to be disclosed (and what doesn’t!)
Q. Who can help me prepare?
In my experience, some accountants tend to be happy enough dealing with the less complex aspect enquiries and compliance checks. Where you get into full investigations covering a number of years, or investigations under HMRC’s Code of Practice 8 (serious avoidance) and Code of Practice 9 (suspected fraud), then I would definitely advise getting a specialist in to help. Specialists like London Tax Network can work with you and your accountant, taking as much or as little of the workload as necessary. They make a difference in terms of their experience dealing with HMRC and their understanding of the processes
Q. Do I need a solicitor?
You only really need a solicitor if you have deliberately under-declared your income or if HMRC are considering prosecution. The majority of tax cases are civil matters – if you are appealing a HMRC decision and going to tribunal, it is likely to be more cost-effective for your tax adviser to work with a barrister rather than instructing a solicitor.
Q. What happens on the day of a HMRC visit and who should I have with me?
This is obviously less relevant at the moment, though as we become accustomed to COVID, HMRC will eventually restart their business premises checks. HMRC will usually give 5 working days notice of their intention to visit. When they arrive, it is best to have a room available for their use and to have your accountant or tax adviser there to make sure HMRC are only asking for what they are entitled to. It would also be useful to have the business owner there so they can answer questions relating to the business and the finance department to assist in that regard. It would also be helpful to have someone there who knows how to work the accounting system. Note that HMRC have the right to inspect, not to search – for example, they are not allowed to count money in cash registers, but they are allowed to watch someone cashing up. Typically, HMRC will ask for a copy of the most recent years accounts together with supporting documentation, so it would be good to have this to hand. Side note – if HMRC turn up unannounced, you do have the right to ask them to return at a later date. This does attract a fine of around £60 per day, but if you are unprepared, it could be worth paying for the extra time.
Q. What do I do when HMRC incorrectly think I have committed fraud?
Tax fraud is when a person has knowingly claimed reliefs they shouldn’t have or if they have deliberately underdeclared their tax liability. If HMRC think you have committed tax fraud, they will investigate under Code of Practice 9 and will give you the option of declaring innocence at the start of the process. As with all things HMRC related, every decision will have an implication and your adviser will take you through these. The important thing to ensure is that if you are innocent, you say this at the start and still provide all possible cooperation. Penalties can arise if HMRC find additional tax due, and cooperation with HMRC can minimise these.
Q. How long can an investigation take?
There are different types of enquiries: aspect enquiries, full enquiry into a tax return, or enquiries/investigations covering a number of years. How long an enquiry takes to resolve will depend on a number of factors, including the seriousness – generally, aspect enquiries are quicker to resolve than full blown investigations – how the queries are dealt with, and HMRC’s response time. I have come across occasions where HMRC issued an enquiry letter, the client was told to ignore it, because the issue would go away and as you can expect, the issue became more serious as HMRC undertook their own investigation.
Q. When will I know their conclusion?
HMRC will write to you and your adviser explaining the outcome of their enquiries and issuing an assessment of the amounts they believe is due. If you disagree, these amounts can be appealed. When the matter is finally settled, HMRC will issue a formal closure notice.
Getting in touch with Mala
If you’d like advice and assistance with HMRC investigations please use the contact details below
07783 236 845 | firstname.lastname@example.org | www.londontaxnetwork.co.uk
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