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HMRC do not make the law

HMRC do not make the law, they interpret it in the same way that accountants and tax advisers do. If we can’t agree on the interpretation then the courts will decide. HMRC is not the final arbiter. 

HMRC have all sorts of helpful information on their website for the public to read. This means that it is often dumbed down and vital points can be missed in the interest of simplicity. This means that Google and ChatGPT can lead to ‘interesting’ ideas from clients on how they can save tax which ends up with me correcting them by quoting chapter and verse of whichever act is applicable.  

Our clients work hard so we don’t want them to pay any unnecessary taxes but we also want them to sleep at night knowing that they have complied with all laws and regulations. 

Too many accountants just rely on the HMRC website and forget to check the correct sources. Proper CPD is really important to maintain professional standards and to give the best advice. We should be better than Google!  

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Software efficiencies

When you started up your business you probably ran it using a spreadsheet or a Word document. But now you’ve filled your time and you’re trying to grow you need better to software to ensure that everything runs as efficiently as possible. Here are some things that I use in my businesses:

Marketing – I use Active Campaign as both my CRM (customer relationship management system) and to email things like this top tip to our clients and prospects. Active Campaign links to forms on our website and to our scorecards.

Process management – Minerva Accountants has lots of beautifully repeatable processes so we use Bright Manager (formerly Accountancy Manager) to manage those processes, client documents, file client emails (so anybody on the team can see all the communication), and automated reminders. My coaching and consultancy business has fewer repeatable processes but it is much smaller so I manage my to do list on Trello

Cash collections – as far as possible we use recurring monthly invoices on Xero and collect payments through direct debit using Gocardless. Any invoice on Xero is automatically fed to Gocardless and, when payment is made, the receipts are matched to the invoices on Xero. Clients can also pay by card using Stripe which also matches the invoices. These save hours of debt collection time and bookkeeping in a small business.

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New year clear out

You don’t have to wait until the new year to do it (see also Spring cleaning and back to school flurries of activity) but I do like an excuse for a good declutter.

Here are some things you might want to look at:
• Stationery – we run a paperless office and don’t have a printer but it still amazes me how much stationery we have around that might be useful to somebody else
• Poor clients – yes, we have a clear out of these every February after the big tax deadline. You probably have a few clients who could be moved on to make room for more suitable ones
• Inbox – how many emails are you subscribed to that you don’t read. If they’re not useful to you (including this one) then don’t just delete them but unsubscribe
• Wardrobe – not a business one but, unless you already do Project 333 you can probably get at least one bag of clothes and shoes to the charity shop or bin
• Client files – archive any paper or digital files you no longer need

Make space to plan your year with our budget workbook and video.

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Tax Tip

Seven reasons to get your tax return done early. (It always amazes me why people leave this until the last 2-3 months)

  1. Know how much tax to pay with plenty of time to save up if necessary
  2. Have your latest accounts ready if you need finance or a mortgage
  3. Latest information available for tax and business planning
  4. Time to implement tax saving measures
  5. Less time to lose paperwork and easier to answer your accountant’s queries better
  6. Your accountant will provide a better service when they have enough time to carry out the work without the pressure of an impending deadline
  7. Your accountant will be happy and may even consider you an A grade client (yes, we do grade our clients)
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Reusing content

Content creation takes both ideas and time so why not make the most of your content and save valuable time by using it in as many ways as possible. For instance, if you are giving a talk you can reuse it as follows:

1. Record it for online use

2. Cut the video into clips for social media

3. Use the audio as a podcast for people to listen to

4. Write it up as several shorter blogs

5. Write it up as an article for your local paper or other publications

6. Use it in your newsletter/e-news

7. Extract quotes for social media

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Tax Tip – VAT Registration limit

If your turnover exceeds, or is expected to exceed, £85,000 in any twelve month period you will need to register for VAT from the following month.

Please note that this is a rolling 12 month period, NOT your financial year. It is a common mistake so, each month, you need to keep an eye on your sales in the previous 12 months.

We’ve had a few clients go over the VAT limit in the middle of their financial year and only find out when we do their year end accounts some time later. This means that they may end up having to pay the VAT themselves so it is worth keeping an eye on your invoicing.

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ICB awards

Last month I was invited to the ICB (Institute of Certified Bookkeepers) awards, also known as the Lucas after the inventor of the double entry system, Luca Pacioli. I love judging the awards as I get to see what the best bookkeepers are doing to help their clients. A good bookkeeper is worth their weight in gold.

I’m also a Champion of the ICB, an honourary position that I was awarded a few years ago. This allows me to use the CICB letters after my name along with my usual FCA.

As well as seeing the best bookkeepers take the stage to collect their awards (including some who had travelled over from the trouble in Ukraine) there were software awards too.

I was delighted when the bookkeepers voted our favourite Xero as the bookkeeping software of the year. We also have client using Freeagent which was chosen as the friendliest software; not surprising as their chief accountant, M, writes all sorts of useful guides.

Which is your favourite bookkeeping software and why?

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Collaboration for the win

I’ve been working away in the frozen North aka Manchester. On one of the days I had a break between speaking engagements so I borrowed a desk from another forward thinking accountant, the lovely Stuart Hurst. We exchanged a few ideas on how we could each improve our accountancy businesses and look after our clients better.

Collaboration beats competition every time.

Who do you collaborate with?

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The beauty of integrated apps

As you know I’ve just been on holiday. We stayed in 3 different towns/cities on the edge of the map! I had to download three different German maps to my satnav in order to drive a total of about 5 hours.

This made me think about how wonderful it is to use integrated applications for business (because I often think about my business when I’m not busy working in it!)

We are a Xero based firm so there are over 1,000 integrated apps available in the official app store and other unofficial ones too. The ones we use most are:

Gocardless – raise an invoice in Xero and it automatically collects the direct debits and matches the payment to the invoice so it saves bookkeeping time too.

Dext/Hubdoc – clients can scan/photograph/email invoices to upload them into Xero (also QBO or Freeagent) where they, or we, can do their bookkeeping. Dext is the most expensive but saves much more time with their OCR (optical character recognition) and machine learning changing the roll of the bookkeeper to checking rather than typing.

Clarity – this is a big hit with clients as we can help them to see their numbers in a simple format and decide how they want to grow their business. The software uploads the latest info from Xero (also Sage or spreadsheet) so that we can discuss the current situation and improvements. It then helps to prepare an action list for the client.

These are the most valuable integrations that we use. What do you have on your list?

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