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Managing your Finances An Introduction to Bookkeeping & Accountancy
Addison Accounts & TuitionClaire Rulton, March 2016
What’s Today Going to Cover?
What you need to know about accountancy and bookkeeping in
a nutshell
Am I going to make you an accountant?
NO!Unless you want to be!
Q1 What are the different legal structures you can
have?
Sole Trader
Limited Company
No simple answer to which is best
Some questions to help you decide
• What’s your turnover and your profit figure• Your future plans to grow the business• What customers may think• Would you like to sell your business in the
future• Reducing tax bill vs. extra time working on
and not in your business
Sole Trader
Pros
• Easiest way to set up • No one else sees your accounts• Losses can be set off against other
income• Personally liable
Limited CompanyPros
• Some companies will only work with Ltd’s• Separate legal entity to the company• May appear more professional (prestige)• Better tax planning opportunities• Easier to sell
Q2 How does VAT work?
• Can apply if you are a sole trader or a Limited company
• The threshold for 2015/2016 is £82000 cumulative
Q3 Do I need an accountant?
Legally No
My favourite question
So why have one?
• An accountant can save you money
• Let you spend time doing the things you enjoy
• Stop you making expensive errors
• Access to the Correct (and Better) Tools and Education
So why have one?
“At some point you will have to let go, and learn to trust other people
to handle some parts of your business”
Q4 What Can I claim(Business Expenditure)
Not allowable• Entertainment• Clothing (except safety/uniforms)• Subscription to Golf/Health Club• Formation costs of Ltd. Co.• Personal drawings (self employed)• Purchase of capital items
Special Rules• Pension payments• Depreciation of capital items• Expenses including private use (Self employed, Ltd Co.)
Business Expenditure
• A business can incur any expenditure it thinks fit and proper
• Only expenditure which is ‘wholly and exclusively’ incurred for the purpose of the business is allowable as a tax deduction
• If you’re not sure seek professional advice• Self employed - 0845 9154 515• Self Assessment - 0845 9000 444
Q5 What’s the Difference between a bookkeeper and an
accountant• Price, Qualification, Level of advice• Bookkeeping = day to day records of
income and expenditure• Accounts = Summary of income and
expenditure over a specific time (usually one year)
Keep in touch
• Radio on the 11th April In2beats & onBBC 3CR
• Accounting software course course 15th April at 44 Harpur St
• facebook.com/addisonaccounts/
• twitter.com/Addisonaccounts
• www.addisonaccounts.co.uk
Managing your Finances An Introduction to Bookkeeping & Accountancy
Addison Accounts & TuitionClaire Rulton, March 2016