FAQ’s & Blog

The deadlines for paying your tax bill are usually:

• • 31 January – for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account
  • 31 July for your second payment on account

Ways to pay

Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You’ll be charged interest and may be charged a penalty if your payment is late.

The time you need to allow depends on how you pay.

Check your payment has been received

• 60 days of selling the property if the completion date was on or after 27 October 2021
• 30 days of selling the property if the completion date was between 6 April 2020 and 26 October 2021

What you need to know

You’ll need the:

• address and postcode of the property
• date you got the property
• date you exchanged contracts when you were selling (or ‘disposing’ of) the property
• date you stopped being the property’s owner (completion date)
• value of the property when you got it
• value of the property when you sold or disposed of it
• costs of buying, selling or making improvements to the property
• details of any tax reliefs, allowances or exemptions you’re entitled to claim
• property type, if you’re not a resident of the UK

From 14 October 2024, HMRC will require customers who want to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before HMRC progress the claim.

Evidence requirements

Customers must tell us which employment they incurred the expense for, as well as whether their employer reimbursed any of the cost, and if they did, show evidence of how much.

They must also have paid tax in the year that they spent money on the expense that they’re claiming. How much they can claim depends on the rate that they pay tax.

Examples of some of the types of evidence HMRC would expect claimants to provide

Subscriptions to professional bodies

Copies of receipts, or other evidence, that shows how much was paid for each professional subscription claimed.

Mileage allowance

A copy of a mileage log for each employment. This should include the reason for every journey and the postcodes for the start and finishing points.

Hotel and meal expenses (subsistence)

Copies of receipts that include the date of a stay or a meal, and the name of the hotel or restaurant.

Expenses for working from home

Evidence that the claimant must work from home, such as a copy of their employment contract. If it’s not stated in the employment contract, we need something else that explicitly states they must work from home. If it’s the claimant’s choice to work from home, they can’t claim this expense.

HMRC Publication

Accountants have to carryout AML and KYC checks on clients and prospective clients

• Identify and verify clients: Accountants need to gather and verify personal details (e.g., name, address, date of birth) using official documents like passports, driving licenses, or utility bills.
• Identify the beneficial owner: Where a client is a company or partnership, Accountants must identify who ultimately owns or controls it (the beneficial owners).
• Monitor ongoing relationships: Accountants are required to regularly review your clients’ activities to ensure they are consistent with the risk profile that has been established. Clients must notify Accountants of material change to their business.

• reporting larger volumes of a cash than expected.
• large bank deposits from businesses they’ve not previously been involved with.
• large unexplained with drawls.
• rapid movements of cash between accounts
• inconsistent client documentation
• discrepancies in reported income versus profit .

• Cash Accounting: Recognizes revenue and expenses when cash is actually received or paid.
• Accrual Accounting: Recognizes revenue when earned and expenses when incurred, regardless of when the cash is exchanged.
• Which one should I use?: Small businesses may use cash accounting for simplicity, while larger companies or those that follow GAAP/IFRS use accrual accounting for more accuracy.

• Balance Sheet: Shows the company’s financial position, including assets, liabilities, and equity, at a specific point in time.
• Income Statement (Profit & Loss Statement): Shows the company’s revenue and expenses over a period, reflecting profitability.
• Cash Flow Statement: Reflects the movement of cash in and out of the business, showing operating, investing, and financing activities.
• Statement of Changes in Equity: Displays changes in the company’s equity over the reporting period.

• Profit: The financial gain after subtracting all expenses from revenue (shown on the income statement).
• Cash Flow: Reflects the actual movement of cash in and out of the business. A company can be profitable but still have cash flow problems if revenues are tied up in receivables or inventory.

• Double-entry accounting is a system where every transaction affects at least two accounts, maintaining the accounting equation: Assets = Liabilities + Equity.
• For every debit entry, there is an equal and corresponding credit entry to ensure balance.

• Bookkeeper: Handles day-to-day financial transactions, including recording sales, purchases, receipts, and payments.
• Accountant: Analyzes financial data, prepares financial statements, offers tax advice, and ensures compliance with financial regulations.

• A trial balance is a report that lists all ledger account balances at a specific point in time. Its purpose is to check the accuracy of the accounting entries and ensure that total debits equal total credits.

• Depreciation: A method of allocating the cost of a tangible asset over its useful life.
• Importance: Depreciation helps in matching the cost of an asset with the revenue it generates over time, which is a key principle of accrual accounting.

• Tax Deduction: Reduces the amount of taxable income. For example, if you have a £1,000 deduction and a 20% tax rate, it reduces your taxes by £200.
• Tax Credit: Directly reduces the amount of tax you owe. A £1,000 tax credit reduces your tax bill by £1,000.

• Accounts Receivable (AR): Money owed to the company by customers for goods or services delivered but not yet paid for.
• Accounts Payable (AP): Money the company owes to suppliers for goods or services received but not yet paid for.

• A Chart of Accounts (COA) is a list of all accounts used in the company’s general ledger, categorizing them into assets, liabilities, equity, revenue, and expenses. It provides a framework for recording financial transactions in a structured way.

• Working Capital: The difference between current assets and current liabilities.
• Importance: It measures a company’s ability to meet its short-term obligations. Positive working capital indicates the company can cover its short-term liabilities, while negative working capital may signal liquidity problems.

• VAT (Value Added Tax): A consumption tax added to the sale of goods and services. Businesses registered for VAT must charge it on sales (output VAT) and can reclaim VAT on purchases (input VAT).
• The net VAT payable/receivable is the difference between the output VAT and input VAT, which must be reported to HMRC periodically (e.g., quarterly).

• Gross Profit: Revenue minus the cost of goods sold (COGS). It measures how efficiently a company uses its resources to produce goods or services.
• Net Profit: Gross profit minus all operating expenses, taxes, and interest. It represents the final profit after all expenses have been accounted for.

• Deferred Revenue: Money received by a company for goods or services not yet delivered. It is considered a liability until the company delivers the product or service, at which point it is recognized as revenue.

• Accruals: Expenses or revenues that have been incurred or earned but not yet recorded or paid. They are added to the accounts to ensure expenses and revenues are recorded in the correct period.
• Prepayments: Payments made in advance for expenses that relate to a future accounting period, which need to be allocated properly over time.

• An audit is an independent examination of financial records to ensure accuracy and compliance with accounting standards and regulations.
• External Audits: Provide assurance to shareholders, investors, and regulators that financial statements are accurate.
• Internal Audits: Focus on assessing internal controls and risk management processes.

• Payroll Accounting: Involves recording all employee compensation, including wages, salaries, bonuses, taxes, and benefits. Proper payroll accounting ensures employees are paid accurately and that the business complies with tax regulations.

• Profitability Ratios: Measure the company’s ability to generate profit (e.g., net profit margin, return on assets).
• Liquidity Ratios: Assess the company’s ability to pay off short-term debts (e.g., current ratio, quick ratio).
• Efficiency Ratios: Indicate how well a company uses its assets (e.g., inventory turnover, accounts receivable turnover).