<\/p>\n
As an accountant in practice I am often amazed by some of the myths which exist about Accounts and Tax. I am not sure where these myths come from but the sentence usually starts with<\/p>\n
\u201cmy friend down the pub told me \u2026\u2026..\u201d<\/span><\/strong><\/em><\/p>\n Here are my top five accounts and tax myth busters starting with:<\/p>\n My polite response to such a statement is that if this was the case then everyone would do it!<\/p>\n I think maybe this myth started back when standard rate tax payers paid no additional income tax on dividends received. Those days are long gone but, not only that, dividends are paid out of post tax profits i.e. profits from the company after \u00a0corporation tax has been deducted!<\/p>\n So tax has been paid, albeit by the company.<\/p>\n Well you do have to add up and subtract some numbers and do a percentage for the tax but with calculators, spreadsheets, Cloud Accounting systems and Bank Accounting Apps this really isn\u2019t too difficult.<\/p>\n There are some very easy to use software packages \u00a0and Apps now; so keeping on top of your numbers isn\u2019t that difficult at all.<\/p>\n I would recommend that you agree your accounting system with your accountant in advance of choosing one.\u00a0 You would be surprised how much of a positive influence this could have on your fees. With accounting, the more you (or your system) do the more you save.<\/p>\n Not only is this incorrect but your accounts can be prepared by anyone.\u00a0 In fact anyone can call themselves an accountant!<\/p>\n Whilst accountants who are members of the recognised accounting bodies are regulated e.g. ICAEW, AAT, ACCA, ACA to name a few, the fact is that there are no overall regulations in place which applies to someone calling themselves an accountant.<\/p>\n So how do you ensure that your accountant knows what they are doing?\u00a0 Well like anything, I would suggest going on recommendation or choosing someone that has been around for a long time and knows there stuff.<\/p>\n If I had a pound for every time I have received a frantic phone call or email from a client who has received an incorrect bill from HMRC then I might not be rich but I would have a few quid in the bank, after tax of course!<\/p>\n In fact I received a call from a client this week who had just received a tax bill for \u00a367,000.\u00a0 Clearly wrong and sorted out in minutes.<\/p>\n Don\u2019t just assume that all correspondence from HMRC is correct.\u00a0 Like anyone, they do make mistakes and it is always worthwhile checking.\u00a0 Especially if the bill is higher than you expect.<\/p>\n Your accountant should always verify the tax calculation and advise on any amounts due.\u00a0 So don\u2019t be afraid to query anything you get through from HMRC.\u00a0 They are not always right.<\/p>\n Not true at all.\u00a0 In fact most companies would be classified as \u2018small\u2019 and would not require an audit.<\/p>\n So what is small?<\/p>\n A company is exempt from an audit if it meets two out of three of the following criteria:<\/p>\n There are some exceptions to these rules so it is worth checking but an audit should be one less thing to worry about.<\/p>\n One final myth which didn\u2019t quite make it to my list.<\/p>\n Not sure I can dispel that one though!!<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" As an accountant in practice I am often amazed by some of the myths which exist about Accounts and Tax. I am not sure where these myths come from but the sentence usually starts…<\/p>\n","protected":false},"author":1,"featured_media":12635,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1067,1033,959],"tags":[],"class_list":["post-663","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-to-review","category-1-about-accounts-and-tax","category-all-posts"],"_links":{"self":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=663"}],"version-history":[{"count":5,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/663\/revisions"}],"predecessor-version":[{"id":12637,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/posts\/663\/revisions\/12637"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/media\/12635"}],"wp:attachment":[{"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cheapaccounting.co.uk\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Sounds familiar?<\/span><\/strong><\/h4>\n
There are ways to pay no tax if you set up a limited company<\/strong><\/span><\/h4>\n
You have to be good at maths to do accounts<\/strong><\/span><\/h4>\n
Your accounts have to be prepared by a qualified accountant<\/strong><\/span><\/h4>\n
HMRC get everything right<\/strong><\/span><\/h4>\n
All companies need an audit<\/strong><\/span><\/h4>\n
\n
All accountants are boring.<\/em><\/strong><\/span><\/h4>\n