(2/5) What is An Accountant? – Part 2…
Resistance is Futile: Compliance and the Basics of Accountancy, Number 2 of 5 in this series introducing accountants and their role in business.
When it comes to the hive minds of HMRC and Companies House, resistance really is futile. If you’re a business, sole trader or self employed, you have a responsibility to ensure that the required information concerning your accounts, and your tax affairs reaches HMRC complete and on time. The penalties for failing to do so, as we all know, can be severe.
The table below illustrates the key information that must be provided for each of these entities in the UK:
|Responsibility||VAT Registered Company||Limited Company (Not VAT registered)||Sole Trader||Self Employed Individual|
|Company Tax Return||Yes||Yes||No||No|
|Annual Return (Companies House)||Yes||Yes||No||No|
|VAT Return||Yes||No||Yes (If takings are more than £81,000 a year)||No|
|Self-Assessment Tax Return||Yes (Director)||Yes (Director)||Yes||Yes|
|Tax and National Insurance||Yes (Director if paid a salary)||Yes (Director if paid a salary)||Yes||Yes|
|P11D, P9D, P11D(b)||Yes (if it employs anyone)||Yes (if it employs anyone)||No||No|
It’s a complicated list, and many businesses and individuals opt to employ an accountant to help them to meet their responsibilities on time. Submitting accounts through a chartered accountant also tends to make an independent auditing inspection by HMRC unnecessary, which can be an added benefit.
Almost all accountants offer these services and, as long as you provide them with appropriate and accurate information, the process is quick and inexpensive. Accuracy, however, relies on the quality of your bookkeeping, that is the collection of data throughout the year relating to your sales, purchases, payments and refunds. Many companies, and even some Sole Traders and Self employed individuals will pay a bookkeeper to do this for them, but often accountancy firms will offer these services at a discounted rate if you process your tax return, or commission other services through them.
The next post in this series deals with so-called Added Value Services, which lie at the heart of an Accountant’s craft. The previous one is an Overview of accountancy as a whole. The other topics are Types of Accounting and Specialties, and Accounting in a Hostile Environment.
May 13, 2014