The Tax Gap

05.11.2019
HMRC are after the small businesses … why?

Am presently trying to certify in Xero on the Adviser programme.  I do not really want to use Xero as in the past when being asked to attend client premises I have found that Xero is based around the Sage accounting concept and is made so much more familiar for accountants than it is for businesses although I would guess that any Xero and Sage experts would heartily disagree with me.  However, from my end, I look after the businesses at the very bottom end, the part where the paperwork is generated and put into computer systems, the part that so many small business owners believe that this is the part that they can do themselves after all, as I get happily told, they have an accountant.  Unfortunately, Xero based businesses I have found time and time again have got themselves in a pickle – business owners with no knowledge of bookkeeping are being asked to use and input to accounting systems.

I had an accountant, actually I have had more than 1 accountant over the years and I do now have one again but only because I have found the right one to trust but she still tells me “you do know you can do this yourself Sue” however I always respond with “yes but I am not qualified in tax only bookkeeping” and we then agree to disagree.  It is a great relationship we have developed as each of us know each other’s strengths.  So what is this post about … the tax gap.  The IPCA have published an article – the link is below and whilst worrying it is still worth putting this in front of small business owners.

Why do I need a qualification to do my own accounts – my own bookkeeping sorry!  Because when I first went into business for myself I also did my own bookkeeping as so many small businesses do but only when I became qualified did I realise how many errors (in all innocence) I had made.  But your accountant is not there to be your bookkeeper, they are there to prepare your accounts from the information YOU give them so if you feel you can do it yourself but you have an accountant, remember that the accountant only prepares from what you give them and if you feel that you know it is correct, I would challenge and ask … is it really?

Leading on from this, HMRC are now seeing that because 95% of the businesses are “small” businesses then that is where they should now direct their forces.  Doing your own bookkeeping without knowing what rules and regulations you need to follow is truly catastrophic for some businesses and I am very grateful to my own doggedness that I qualified as a bookkeeper so that I could not just keep my own business safe but also those of the other clients that this business works with.

See what you feel about the article but please, if you are doing your own bookkeeping to save money … is it really worth it and do you truly know the differences between capital and revenue expenditure, zero and exempt VAT and business and personal expense mixes.  If not, then that is why this business is here.  Give us a call for a chat and feel the difference that a value led business can give to yours.

https://www.icpa.org.uk/blog/tax_gap_just_a_thought

 

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