Christmas parties are a great way to reward your employees and celebrate the end of the year.
To make the festive season even sweeter, HMRC provide tax exemptions for limited companies who put on a Christmas party for employees.
HMRC says that it receives thousands of reports of fraudulent tax refund messages every year.
This is part of a worrying trend that sees scammers pretending to be HMRC and using voicemail, text messages and emails to convince victims to hand over personal banking details.
As a result, you should think twice before acting on messages left by the tax service and must consider the possibility that any message claiming to be from the HMRC could be fraudulent.
To keep your details secure, follow our tips and tricks below. We will discuss the methods scammers use and how to look out for key warning signs.
Voicemail scams: HMRC legal action
Always be wary if a caller claims to be HMRC.
According to Which?, scammers will pose as HMRC and cold-call taxpayers – threatening them with warrants for their arrest or legal action. An automated voice will warn you that a legal case is filed in your name or that you are in trouble because you have not paid your taxes. They will then threaten you with prosecution if you do not call back or will ask you to press ‘1’ to make an immediate payment.
Fraudulent phone messages will pressure you to act quickly and to dial their number. They will then ask for you bank details to pay for these outstanding ‘taxes’.
What to do?
- If you answer their call, ask for the caller to verify their identity.
- Don’t give out any personal information.
- Don’t dial any numbers that they ask you to.
- Hang up and independently look for HMRC’s number on the uk website or on a trusted piece of correspondence – such as a letter or bank statement you’ve been sent.
- Ring the trusted HMRC number to check whether your phone call was fraudulent or genuine.
- Report the scam to HMRC or contact Action Fraud on 03001232040.
HMRC will usually use your tax code in a call
HMRC does call people about outstanding tax bills and sometimes use automated messages, however they will include your taxpayer reference number in the message. They also rarely discuss something like a tax investigation out of the blue. If you are uncertain if the caller is genuine, hang up and call HMRC directly to check.
For tax credits, HMRC do not include your details in any voicemail messages.
Email scams: Tax refund and rebates
Fake emails are a common ploy, and in 2017-18 alone, HMRC received over 771,000 reports of tax refund and rebate scams.
Fake emails will tell you about a tax rebate or penalty owed and will ask you to click a link or to provide your personal or payment information.
- Whilst refunds do happen, HMRC will never send notifications for tax rebates, refunds or personal & payment information by email.
- The email address of the scammer will often look suspect and will not have an official domain.
- If the email asks you to download a PDF attachment or to click a link, do not do it.
- Do not reply to the email.
Text scams: HMRC owes you money
Beware of text messages that say you are due a tax rebate. Whilst it’s easy to get excited by the idea of a possible hand-out, it’s best to not get carried away.
- HMRC do send texts, but they will never ask for personal or financial information via text.
- Do not open any of the links in the message and don’t reply.
Social Media Scams: HMRC Customer service
Third-party companies: Refund promises
Third party companies entice taxpayers by claiming that they can get them a tax rebate or refund for a fee.
- HMRC states that they have no link with these companies and that any rebate promises may be unfounded.
- Check all the terms and conditions of these companies before using their services.
- Personally, we recommend you do not take up these companies’ services.
Email: Your goods are being held at customs
These emails are known as ‘419 scams’ and trick you with the “pay a little, get a lot” promise. They usually ask for personal details or payment in exchange for fake winnings such as lottery winnings, inheritance payments and seized goods that are being held at customs.
Some taxpayers may fall foul of this scam because:
- They may have recently ordered items online from abroad
- Scammers sometimes use the name of a real HMRC employee to make the email look legitimate.
Remember that HMRC never asks for personal information over email, so report the email and block the sender.
Please note that this is not exhaustive list of all HMRC scams. Scammers are surprisingly creative and scam tactics are always evolving. Always approach any HMRC message with caution and contact HMRC directly to confirm that any message you have received is genuine. Applying common sense and looking out for key scam traits will go a long way in helping you to avoid failing into a scammer’s trap!
It’s always a bit of shock the first time you submit a self assessment tax return and realise that you have to pay your tax in a lump sum rather than having it deducted from your wages monthly.
It’s a double shock when you realise that you need to make payments on account towards next year’s tax bill as well. This generally means that your first payment to HMRC as a self employed person is generally 50% higher than you think it would be.
Many people set up a company through their accountant and use their accountant’s address as their registered office. There are a number of reasons why this just isn’t a good idea:
You, as a director of the company, are wholly responsible for the administration of the company. If your accounts aren’t filed on time or your confirmation statement isn’t submitted then it is your responsibility, not your accountants.
If your registered office is at your accountants’ address, then all of your correspondence from Companies House and probably also HMRC will be delivered to the registered office. If you miss submitting your confirmation statement on time then the chances are that you probably wouldn’t even know because you wouldn’t be receiving the correspondence. The penalties for not filing your accounts on time start at a small fine of £100, rising through £300 to £1,000, depending on the lateness of filing. The penalty for not submitting your confirmation statement in time is that your company could be struck off.
If you’re wholly responsible for your company’s affairs, then it only makes sense for you to be in full knowledge of what goes on with your company so you need to be receiving the correspondence yourself.
If your accountant is letting you use their office as a registered office then they will be charging you for this service (even if it’s hidden within the annual fee). Charges can be between £50 and £300 per year just for using their address.
If an accountant sets up your limited company for you and automatically uses their address or if they persuade you to use their office as the registered office address then you might need to think about their motivations in doing so. On the one hand, it does make life easier for them in that they receive the correspondence so then they know when your confirmation statement etc. is due (they can actually sign up to email reminders), on the other hand it also means an additional and very easy revenue stream for them.
We don’t let clients use our address as a registered office address as we want our clients to retain some autonomy over their own affairs. If you want to find out more about our all inclusive services then please give us a call on 0333 305 8772.
18 May 2018
Everyone can access their personal tax account on HMRC’s gateway. You can start using this service at https://www.gov.uk/personal-tax-account
You can use your personal tax account to:
- Check your income tax estimate and tax code
- Fill in, send and view a personal tax return
- Claim a tax refund
- Check and manage your tax credits
- Check your State Pension
- Track tax forms that you’ve submitted online
- Check or update your Marriage Allowance
- Tell HMRC about a change of address
- Check or update benefits you get from work, for example company car details and medical insurance
To sign in for the first you will need:
- A Government Gateway account – you’ll have one if you’ve used HMRC online services before. If you don’t have one you can register at http://www.gateway.gov.uk/
- A National Insurance number
You will also need to prove your identity. You can use one of the following as proof:
- Your bank account details
- Your P60
- Your 3 most recent payslips
- Your passport number and expiry date
Signing in creates your account.
18 May 2018
We’re contacted, almost on a daily basis, by companies based out of the country offering to do some of our book-keeping and payroll, quite often at rates which are way below our national minimum wage.
Whilst this is oh so tempting in that we can dramatically increase our profit margins, it is something that we would never ever do for a number of reasons:
We believe in offering a quality service to our clients. Every piece of work in our office is checked by a team leader before it goes out to you in the form of management reports or VAT returns or year end accounts/tax returns. To maintain quality control of the data we need this work to be carried out in our office so that everything is traceable and carried out in the same way. We have quality processes in place here which we wouldn’t be able to enforce if the work was to leave the office.
We believe in accountability and transparency. If you, the client, has a query about how the accounts are put together, you should be able to speak to the person in our office who has actually carried out the work. This wouldn’t be possible if we outsourced the work.
We believe your data is important and actually very precious. Sending your data out of the office, with no control over who has access to it, is absolutely unthinkable. We are registered with the Information Commissioners Office and take data protection very seriously.
We believe in trust. Our clients trust us to keep their data safe and carry out their work diligently. I (Helen) absolutely trust the staff that are working in the office to carry out the work in this manner. By subcontracting the work out of the office we would be breaking our contract of trust with our clients and probably a whole load of GDPR Regulations.
Finally, we believe that paying staff below the minimum wage (even if they are abroad and so not subject to our legislation) is just plain wrong.
If you have any queries about how we protect your data, please feel free to give us a call on 0333 305 8772.
18 May 2018
Subject Access Requests (SAR) are written requests from an individual or their representative for access to the personal information that you are processing (using and storing) about them. Under the Data Protection Act (DPA), you were allowed to charge £10 for handling a SAR. Under the new General Data Protection Regulations (GDPR) you are no longer allowed to charge a fee for this.
After months of press and hype, the General Data Protection Regulations (GDPR) come into effect this month on 25 May 2018.
There’s a lot of scaremongering out there – you may have had emails offering you costly GDPR compliance services so that you don’t get hit with heavy fines.
Landlords used to be able to deduct 100% of their mortgage interest when calculating taxable profit. In April 2017 this was reduced to 75%.
You can use the maternity and paternity calculator for employers at https://www.gov.uk/maternity-paternity-calculator to calculate your employee’s Statutory Maternity Pay (SMP), paternity or adoption pay.
So you’re thinking of starting a business. Should you set yourself up as a limited company or a sole trader? They both have advantages and disadvantages and depends entirely on your individual circumstances. It used to always be tax beneficial to set up as a limited company. However, since the introduction of dividend tax, this is not now always the case.
Making Tax Digital is the government’s way of getting businesses to keep digital records and report them in real time.
What this means is that you will no longer be able to keep manual records and just submit them with your tax return at the end of the year.
Records will need to be kept digitally using accounts software and quarterly submissions will need to be made to HMRC as well as your annual tax return.
On 14 February 2018, the Government’s Tax-Free Childcare Scheme was opened up to all children under the age of 12. The new scheme helps working parents with the cost of childcare.
The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. You can use the National Minimum Wage calculator at https://www.gov.uk/minimum-wage-calculator-employers to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.
The minimum contributions you must pay into your staff’s pension scheme are shown in the table below.
Minimum contributions are being introduced gradually over time. You will usually pay pension scheme contributions either as a fixed amount or based on a percentage of earnings.
There are so many accounting softwares on the market now that it has become an absolute minefield. Some are desktop based and are stand alone. Some are cloud based. Some are quite expensive and then there are others that are even free!
A couple of years ago we were in the situation whereby we had many clients on different softwares bringing in their books for the year end. As well as having to do the accounts preparation for these clients, we were also having to try and figure out the different softwares as well. This actually became quite unmanageable which is why we decided that we were going to try and go down the line of one book-keeping software for our clients and transfer them all on to it.
Some of the software on the market is great for the user but not so friendly for the accountant, such as Quickbooks or Free Agent. Other software is great for the accountant but not so easy for the end user, such as Sage. Any desktop versions quickly become out of date and it becomes tricky in that the client’s version has to be the same as our version and it’s actually quite costly for everyone to upgrade all the time. This is why we decided that we definitely needed a software that was cloud based so that everyone would have access to the same version.
When we first came across Xero we were very sceptical. Could it really be this easy and still provide the functionality and reporting functions needed to produce accurate accounts? Anyway, we thought we’d give it a go and have never looked back! We absolutely and passionately believe that Xero is the best and most progressive accounting product on the market at the moment. Whilst it certainly isn’t the cheapest, we have found that with the time saving features it has, it is just as cost effective and well worth the additional money.
We have spent the past 2 years converting our existing clients onto Xero and are only offering accounting services to new clients if they use Xero. We have Xero bronze partner accreditation which means that we’re actually quite good at it. In order to maintain this accreditation, all staff in the office have to undertake roughly 20 hours per year of specific Xero training. If we invested this much time each in a lot of different softwares then quite frankly we wouldn’t have any time left to do the work.
Our dot-to-dot accountancy package includes either read only or invoice only access to Xero. We’re confident that once you sign up with us and see the beautiful reports you get each month you’ll be pleasantly surprised. To find out more about our dot-to-dot accountancy package check out the “What’s included” page or give us a call on 0333 305 8772.
15 February 2018
A lot of people think that cheaper means a lesser service. This isn’t always necessarily the case. We still carry out the same work, have all the right qualifications and licensing in place and carry professional indemnity insurance. We actually aim to provide a better service than traditional accountants whilst still charging affordable fees. The differences are generally in our overheads and we make savings in the following ways: -
Premises – we operate out of rural premises rather than having city centre offices. Not only is the rent a lot cheaper but we also don’t have to pay for car parking. This makes for happy staff who can get to work easier, quicker and cheaper and without having to fight through town traffic to get here. We’re also pretty self sufficient. So rather than operating out of serviced offices, on which you pay a premium, we look after ourselves in much more basic accommodation. We’re very lucky to be in what most people would consider an idyllic setting (we do have to sometimes stop and wait for cows to cross the road)!
Client meetings – by restricting the time we spend with clients we can keep our costs down. We’ve found in the past that you can have a client meeting for an hour, the results of which could have been achieved with a 5 minute phone call. By keeping this time down, we’re also keeping the costs down. We don’t offer introductory consultations because we’ve found that we can capture all of the information just as easily in a form which we send out to prospective clients and we’re always happy to have a phone chat about anything that’s concerning them.
Staffing – we try and keep our staffing ratios at the right level. We have different levels of qualifications and the right people will work on the right kind of work so we’re not paying qualified accountants to do the filing or photocopying. Also, with running everything monthly we manage to keep our staffing ratios relatively low because we spread the work out across the year. There are a lot of traditional accountants who take on more staff than they need because of the yearly rush to get tax returns done. These staff could then be sitting idle for a few weeks a year when the workload dips but still being paid their salary. I’ve worked for quite a few accountancy firms and this kind of practice seems to be the norm across the board.
Efficiency – I hate to say it but a lot of the work we carry out is just plain repetitive. We have systems in place that ensure efficiency and that work is carried out in the same way on each job and yes we do use some automation within the software that we use. By being more efficient, we can carry out the work quicker and so therefore charge less.
Frugality – there’s a lot to be said for being just plain tight fisted! We think about every penny that we’re going to spend and whether it’s really necessary. We even do things like buy our paper and envelopes from ebay where it tends to be cheaper and the heating doesn’t go on in the office unless everyone has put a jumper on!
We do all of these things so that we can pass the savings on to you the client. We’re passionate about providing the best service we can at the lowest possible fee. If you’re still not sure about switching to a remote service, give us a call on 0333 305 8772 to chat about any queries you have.
This is actually a really easy one to answer. If you had a leaking toilet would you fix it yourself or call out a plumber. Similarly, would you cut your own hair to try and save the cost of a haircut.
Running a small business is hard and traditionally every small business owner has also been expected to keep their books in good order.
When I was growing up, my dad used to have a chemist shop. He would work all day in the shop and spend every Friday night slogging over the books so that they would be up to date ready for VAT return time. In truth, apart from the fact he was missing out on family time, he really wasn’t much good at it and it used to take him hours. As he got older, and had less energy, he finally employed a book-keeper who would come in to the shop once a month and get the books up to date. The amount of stress this relieved was enormous.
Generally, most small business owners are really good at what they do – whether they are a florist, electrician or hairdresser, but not so good at keeping their books in order.
By outsourcing your book-keeping you could actually save money as well as time. If you weren’t spending your time book-keeping you could be chasing more sales leads or developing some other side of your business. Trained and experienced book-keepers are generally quicker and more accurate than the average business owner so what might take the small business owner 4 hours to do, a trained book-keeper might undertake the same task in less than an hour. If your book-keeping is accurate right from the start, the amount of work needed to undertake your year end accounts is also reduced.
Regular book-keeping by a trained professional can also help you keep your eyes on how your business is doing. Included in our book-keeping service are monthly management reports which show how much profit (or loss) you are making on an ongoing basis. You don’t have to wait until the end of the year to find out if you’re making any money.
This is why we’ve developed the dot-to-dot accountancy package which includes your book-keeping as well as your year end accounts and tax returns. Not only will this get our clients ready for making tax digital (where quarterly submissions will need to be made to HMRC) we believe that regular monthly book-keeping which feeds directly into the year end accounts, together with the monthly management accounts, will greatly enhance our clients’ businesses and help them develop.
If you want to find out more about our dot-to-dot accountancy package, please give us a call on 0333 305 8772.
There are some businesses that would definitely need a chartered accountant, for instance if they have a turnover high enough to require an audit or if they are an IFA and have regulatory requirements for a chartered accountant. However, this is actually a small proportion of the businesses that use accountants. Anybody can call themselves an accountant but what do the different types of accountant actually mean.
This can be anybody who prepares accounts and tax returns and charges fees for doing so. They don’t necessarily need to be qualified and may not be a member of a professional body. Be aware – if they aren’t a member of a professional body, they might not hold any professional indemnity insurance either so make sure you always check before engaging their services.
A licensed accountant must be qualified to prepare accounts and tax returns on your behalf. They will be members of a professional body, such as the AAT (The Association of Accounting Technicians). By virtue of this professional membership, they will have adequate public liability insurance, undertake continuing professional development so they are up to date with new legislation and will be regulated by guidelines relating to professional conduct and ethics. A licensed accountant will be able to undertake the normal day to day accountancy tasks such as preparing your year end accounts and submitting your tax returns. They will not be able to do auditing (which is only required by large companies) or give you specialist tax planning advice (such as where to invest your money in order to plan for the future).
A chartered accountant must have undertaken a chartered qualification and will be members of a chartered body, such as ICAEW (The Institute of Chartered Accountants in England and Wales) or ACCA (The Association of Chartered Certified Accountants). As well as the usual accounting tasks such as preparing your year end accounts and submitting your tax returns, they will usually be able to carry out audits (providing they hold an auditing certificate) and give you specialist tax planning advice.
In the majority of cases, a licensed accountant is probably the most appropriate person to carry out accountancy services for small and micro businesses. They tend to charge less than chartered accountants and most small and micro businesses do not need the extra level of specialist tax advice a chartered accountant can provide and most certainly don’t need an audit undertaking.
Be wary of entrusting your accounts to someone who isn’t either licensed or chartered as you have no safety net, such as being able to complain to a professional body, should anything go wrong. It is also unlikely that they will be keeping up to date with the continually changing legislation around accounts and tax. Both licenced and chartered accountants have to do this in order to keep their practising certificates. Generally, non-licensed/non-chartered accountants are much cheaper but there’s a reason for this as they don’t have the same kinds of overheads in order to meet the strict standards that a professional body requires.
Dotty About Accounts Ltd is licensed and regulated by the Association of Accounting Technicians (AAT) under licence no. 5551. We are also regulated by the AAT in respect of money laundering legislation.