Managing your Finances An Introduction to Bookkeeping & Accountancy

Addison Accounts & TuitionClaire Rulton, March 2016

What’s Today Going to Cover?

What you need to know about accountancy and bookkeeping in

a nutshell

Am I going to make you an accountant?

NO!Unless you want to be!

Q1 What are the different legal structures you can

have?

Sole Trader

Limited Company

No simple answer to which is best

Some questions to help you decide

• What’s your turnover and your profit figure• Your future plans to grow the business• What customers may think• Would you like to sell your business in the

future• Reducing tax bill vs. extra time working on

and not in your business

Sole Trader

Pros

• Easiest way to set up • No one else sees your accounts• Losses can be set off against other

income• Personally liable

Limited CompanyPros

• Some companies will only work with Ltd’s• Separate legal entity to the company• May appear more professional (prestige)• Better tax planning opportunities• Easier to sell

Q2 How does VAT work?

• Can apply if you are a sole trader or a Limited company

• The threshold for 2015/2016 is £82000 cumulative

Q3 Do I need an accountant?

Legally No

My favourite question

So why have one?

• An accountant can save you money

• Let you spend time doing the things you enjoy

• Stop you making expensive errors

• Access to the Correct (and Better) Tools and Education

So why have one?

“At some point you will have to let go, and learn to trust other people 

to handle some parts of your business”

Q4 What Can I claim(Business Expenditure)

Not allowable• Entertainment• Clothing (except safety/uniforms)• Subscription to Golf/Health Club• Formation costs of Ltd. Co.• Personal drawings (self employed)• Purchase of capital items

Special Rules• Pension payments• Depreciation of capital items• Expenses including private use (Self employed, Ltd Co.)

Business Expenditure

• A business can incur any expenditure it thinks fit and proper

• Only expenditure which is ‘wholly and exclusively’ incurred for the purpose of the business is allowable as a tax deduction

• If you’re not sure seek professional advice• Self employed - 0845 9154 515• Self Assessment - 0845 9000 444

Q5 What’s the Difference between a bookkeeper and an

accountant• Price, Qualification, Level of advice• Bookkeeping = day to day records of

income and expenditure• Accounts = Summary of income and

expenditure over a specific time (usually one year)

Keep in touch

• Radio on the 11th April In2beats & onBBC 3CR

• Accounting software course course 15th April at 44 Harpur St

• facebook.com/addisonaccounts/

• twitter.com/Addisonaccounts

• www.addisonaccounts.co.uk

Managing your Finances An Introduction to Bookkeeping & Accountancy

Addison Accounts & TuitionClaire Rulton, March 2016