Changing accountants is generally a straightforward process, although the arrangements will depend on your circumstances and the work currently being undertaken by your existing accountant.
Do I need to tell my existing accountant?
You should inform your existing accountant that you intend to change advisers and agree how any outstanding work will be dealt with.
It is worth checking whether there are outstanding fees, approaching filing deadlines or other matters that need to be resolved before the changeover.
Will my new accountant contact my previous accountant?
With your authority, your new accountant will normally contact your previous accountant to make professional enquiries and request relevant accounting and tax information.
This helps the new accountant understand your circumstances, identify any outstanding matters and arrange a suitable handover.
When is the best time to change accountants?
You do not necessarily need to wait until the end of a financial year or tax year. However, the timing should take account of upcoming deadlines and any work already in progress.
How can Johnson Accountants help?
Johnson Accountants can discuss your accounting and tax requirements, explain the proposed services and fees, and outline the steps involved in transferring your affairs.
Before accepting an appointment, we will also need to complete our client acceptance and identity verification procedures.
If you are considering changing accountants, please contact us to discuss your circumstances.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
When appointing an accountant, the information you need to provide will depend on whether you are an individual, sole trader, landlord or limited company, and the services you require.
At Johnson Accountants, we will explain what information is needed for your circumstances before commencing work.
What information will I need to provide?
We will generally ask for your contact details, information about your accounting and tax affairs, and details of the services you require.
Depending on your circumstances, we may also need:
- Your Unique Taxpayer Reference (UTR), if you have one.
- Your National Insurance number, where relevant.
- Details of your business activities and accounting records.
- Information about previous tax returns and accounts.
- Your company registration number, if you operate through a limited company.
- Details of any approaching tax or filing deadlines.
Not every item will apply to every client.
Will I need to provide proof of identity?
Yes. As a firm of accountants supervised for anti-money laundering purposes, we are required to undertake appropriate client identification and verification procedures.
We will explain the information and documentation required as part of our client acceptance process. Additional checks may be necessary depending on your circumstances.
What if I already have an accountant?
If you are changing accountants, we will normally request your authority to contact your previous accountant and obtain relevant professional and accounting information.
This helps us understand your existing arrangements and identify any outstanding matters.
Do I need to have all my paperwork ready before contacting you?
No. You can contact us initially to discuss your requirements.
We can then explain what information will be needed, the services we may be able to provide and the proposed fees.
How can Johnson Accountants help?
We can discuss your accounting and tax requirements, explain our client acceptance procedures and outline the information needed to get started.
If you are considering appointing an accountant, please contact Johnson Accountants to discuss your circumstances.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
You do not have to appoint an accountant to form a limited company in the UK. You can register a company directly with Companies House.
However, forming a company is only the first step. Once incorporated, the company and its directors have ongoing legal, accounting and tax responsibilities.
What should I consider before forming a limited company?
Before incorporating, it is worth considering whether operating through a limited company is appropriate for your circumstances.
Factors may include:
- The nature of your business and expected income.
- How you intend to pay yourself.
- Corporation Tax and personal tax implications.
- The additional administration and reporting requirements.
- Whether operating as a sole trader might be more suitable.
What responsibilities will I have?
A limited company generally needs to maintain accounting records, prepare annual accounts and submit confirmation statements to Companies House.
Corporation Tax obligations must also be considered, including registration or notification requirements where applicable, and the preparation of Corporation Tax returns when required.
Depending on its activities, the company may also need to deal with VAT, PAYE and other reporting obligations.
When should I speak to an accountant?
Ideally, before incorporating.
An accountant can explain the differences between operating as a sole trader and through a limited company, help you understand the potential tax implications and advise on the accounting and reporting responsibilities involved.
At Johnson Accountants, we can help you understand these considerations before you decide how to structure your business.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
Yes. You can change accountants at any time during the financial year. You do not have to wait until your year-end or until your accounts or tax return have been completed.
However, the timing of the change may affect how responsibilities are divided between your existing accountant and your new accountant.
What happens if I change accountants partway through the year?
Your new accountant will normally request information from your previous accountant, with your authority, to understand the work already completed and any outstanding matters.
This may include accounting records, tax information, previous accounts and details of upcoming filing deadlines.
Will changing accountants affect my filing deadlines?
Changing accountants does not extend your statutory filing or payment deadlines.
It is therefore important to identify any outstanding accounts, tax returns, VAT submissions or payroll obligations before the handover.
If a deadline is approaching, you should establish which accountant will be responsible for completing the work.
Do I need to tell my existing accountant?
Yes. You should inform your existing accountant that you intend to change advisers and authorise the release of relevant information to your new accountant.
Your new accountant will usually contact your previous accountant to make professional enquiries and request the information needed for the handover.
How can Johnson Accountants help?
At Johnson Accountants, we can explain the information required when changing accountants and help coordinate the handover so that your accounting and tax responsibilities continue to be managed.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
The cost of an accountant for a small business depends on the services required, the complexity of the business and the amount of work involved.
For example, a sole trader requiring an annual Self Assessment tax return will generally have different accounting requirements from a limited company needing annual accounts, Corporation Tax returns, bookkeeping and payroll services.
What affects accountancy fees?
Several factors can influence the cost of accountancy services, including:
- Whether you operate as a sole trader, partnership or limited company.
- The quality and completeness of your accounting records.
- The number and complexity of transactions.
- Whether you require bookkeeping, VAT returns or payroll services.
- The level of advice and ongoing support required.
Are accountancy fees fixed or charged hourly?
Accountants may charge fixed fees for agreed services or charge based on the time spent carrying out the work.
A fixed fee can provide greater certainty about costs, provided the services included are clearly defined.
Additional work outside the agreed scope may be charged separately.
Can I reduce my accountancy costs?
Maintaining accurate accounting records, keeping supporting documents organised and providing information promptly can help reduce the time needed to complete your accounts and tax returns.
Using suitable accounting software may also make record-keeping more efficient.
How does Johnson Accountants calculate its fees?
At Johnson Accountants, fees are based on the nature and scope of the work required.
We discuss your accounting and tax requirements before providing a quotation, so you can understand which services are included and the associated costs.
If you would like to discuss your requirements, please contact Johnson Accountants to arrange an initial conversation.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
A small business accountant can provide a range of accounting, tax and business support services. The services required will depend on whether you operate as a sole trader, partnership or limited company, together with the size and complexity of your business.
An accountant’s role can extend beyond preparing annual accounts and tax returns to helping you understand your financial position and meet your reporting obligations.
What accounting and tax services are available?
Common services for small businesses include:
- Preparation of annual accounts.
- Self Assessment tax returns for sole traders, partners and company directors where required.
- Corporation Tax returns for limited companies.
- VAT returns and Making Tax Digital compliance.
- Bookkeeping and accounting records.
- Payroll administration and PAYE reporting.
- Construction Industry Scheme (CIS) compliance.
- Confirmation statements and Companies House filing support.
Not every business will require all these services.
Can an accountant help with accounting software?
Yes. An accountant can help you select and use accounting software appropriate for your business.
This may include assistance with setting up the software, maintaining accurate records, reconciling bank transactions and understanding financial reports.
Can an accountant provide ongoing business support?
Depending on the services agreed, an accountant may also assist with management accounts, cash flow information, tax planning and other financial matters affecting your business.
Regular accounting information can help business owners make more informed decisions.
What services does Johnson Accountants offer?
Johnson Accountants provides accounting and tax services to small businesses, sole traders and limited companies.
We discuss your circumstances and requirements before agreeing the services to be provided, helping ensure that the work is appropriate to your business.
If you would like to discuss your accounting or tax requirements, please contact Johnson Accountants.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
An accountant’s fixed fee will normally cover the services agreed at the outset of the engagement. The precise services included will depend on the nature of your business, your accounting requirements and the scope of work agreed with your accountant.
It is important to understand what is included in the quotation, as not all accountancy services will necessarily be covered by a single fixed fee.
What services might be included in a fixed fee?
Depending on your business and the agreement with your accountant, a fixed fee may cover:
- Preparation of annual accounts.
- Self Assessment or Corporation Tax returns.
- Submission of accounts and returns to the relevant authorities.
- Routine correspondence relating to the agreed services.
- Other specified accounting or tax compliance work.
Services such as bookkeeping, VAT returns, payroll and confirmation statements may be included or charged separately.
What work might result in additional fees?
Additional fees may arise where work falls outside the original agreement.
Examples include:
- Correcting incomplete or inaccurate bookkeeping records.
- Dealing with previously undisclosed transactions or tax matters.
- Preparing additional tax returns or reports.
- Responding to HMRC enquiries or investigations.
- Providing specialist advice or undertaking additional work requested during the year.
Whether additional charges apply will depend on the terms agreed with your accountant.
Does a fixed fee mean the price can never change?
Not necessarily.
A fixed fee is generally based on an agreed scope of work and the information available when the quotation is prepared.
If your business circumstances change or additional services become necessary, the fee may need to be reviewed.
Any changes should be discussed so that you understand the additional work and associated costs.
How does Johnson Accountants agree its fees?
At Johnson Accountants, we discuss your requirements before providing a quotation and setting out the services to be undertaken.
The agreed scope of work helps establish which services are covered and when additional fees may apply.
If your accounting or tax requirements change, we can discuss the implications before undertaking further work.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
You may need to register for Self Assessment if you have income or gains that must be reported to HM Revenue & Customs (HMRC), or if HMRC requires you to complete a tax return.
Whether registration is necessary depends on your circumstances and whether the relevant tax can be dealt with through another reporting or collection method.
You may need to complete a Self Assessment tax return if you:
- Are self-employed as a sole trader and have gross trading income of more than £1,000 during the tax year.
- Are a partner in a business partnership.
- Receive income from property, savings, dividends or overseas sources that needs to be reported through Self Assessment.
- Have a Capital Gains Tax liability or other gains that must be reported through Self Assessment.
- Need to pay the High Income Child Benefit Charge and are not paying it through PAYE.
Other circumstances may also require a tax return. Being employed or paying tax through PAYE does not automatically mean that Self Assessment is unnecessary.
Not everyone receiving income outside employment needs to register. Some income and gains can be reported to HMRC through alternative arrangements.
When is the registration deadline?
Where you are required to notify HMRC that you are chargeable to tax, the usual deadline is 5 October following the end of the relevant tax year.
For example, if you first needed to notify HMRC of a tax liability for the tax year ended 5 April 2026, the usual notification deadline was 5 October 2026.
The position may differ if HMRC has already issued a notice requiring you to complete a tax return.
What happens if I register late?
If you have missed the relevant deadline, you should contact HMRC as soon as possible.
Late notification may result in penalties where tax remains unpaid, while separate penalties can apply if a tax return is submitted after the applicable filing deadline.
Your filing deadline will depend on your circumstances and any notice to file issued by HMRC.
How can Johnson Accountants help?
Johnson Accountants can help establish whether you need to register for Self Assessment, assist with registration and prepare your tax return.
We can also help you understand your filing obligations and the information required to complete your return.
If you are unsure whether Self Assessment applies to your circumstances, please contact Johnson Accountants to discuss your requirements.
For further information, see GOV.UK – Register for Self Assessment.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
You generally need to register for VAT with HM Revenue & Customs (HMRC) if your business’s VAT taxable turnover exceeds the registration threshold.
The VAT registration threshold is currently £90,000.
When is VAT registration compulsory?
You must normally register for VAT if:
- Your VAT taxable turnover for the previous 12 months exceeds £90,000.
- You expect your VAT taxable turnover to exceed £90,000 in the next 30 days alone.
- You meet certain other registration conditions, including some circumstances involving overseas businesses.
VAT taxable turnover includes sales that are subject to VAT at the standard, reduced or zero rate. It does not generally include exempt supplies.
How is the VAT threshold calculated?
The £90,000 threshold is calculated over a rolling 12-month period, not simply your accounting year or the tax year.
You should review your VAT taxable turnover at the end of each month to establish whether registration is required.
When must I register for VAT?
If your taxable turnover exceeds £90,000 over the previous 12 months, you must normally notify HMRC within 30 days of the end of the month in which you exceeded the threshold.
If you expect to exceed £90,000 in the next 30 days alone, you must notify HMRC by the end of that 30-day period. The effective date of registration is normally the date you first expected to exceed the threshold.
Can I register voluntarily?
Yes. A business with taxable turnover below £90,000 can generally register voluntarily for VAT.
Voluntary registration may be beneficial where you incur VAT on business purchases, although it also creates VAT reporting and record-keeping obligations.
Before registering voluntarily, it is worth considering whether your customers can recover VAT, as charging VAT may increase the cost of your services to customers who cannot reclaim it.
How can Johnson Accountants help?
Johnson Accountants can help assess whether VAT registration is required, calculate your taxable turnover, assist with registration and advise on VAT returns and Making Tax Digital requirements.
For further information, see GOV.UK – Register for VAT.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
Making Tax Digital for Income Tax (MTD) is being introduced in stages for sole traders and landlords.
The date you are required to start depends on your qualifying income in an earlier tax year, not your expected income or taxable profits in the year you join.
| MTD start date | Qualifying income threshold | Tax year used to assess income |
|---|---|---|
| 6 April 2026 | Over £50,000 | 2024/25 |
| 6 April 2027 | Over £30,000 | 2025/26 |
| 6 April 2028 | Over £20,000 | 2026/27 |
For example, if your qualifying income was £35,000 in the tax year ended 5 April 2026, you would generally be required to comply with Making Tax Digital from 6 April 2027, even if you expect your income to fall below £30,000 during 2027/28.
Is the Making Tax Digital threshold based on turnover or profit?
The thresholds are based on qualifying income before deducting expenses, rather than taxable profits.
For sole traders, this generally means gross business income before deducting business expenses.
For landlords, it generally means gross rental income before deducting property expenses, such as repairs, insurance, letting agent fees and other allowable costs. It is not based on the profit remaining after those expenses.
If you receive both self-employment income and rental income, the qualifying amounts are added together when determining whether you exceed the relevant threshold.
For example: If your gross self-employment income was £18,000 and your gross rental income was £17,000 during 2025/26, your combined qualifying income would be £35,000. You would generally be required to comply with Making Tax Digital from 6 April 2027, even if your taxable profits were substantially lower.
What if I should already be using Making Tax Digital?
If your qualifying income exceeded £50,000 in 2024/25, you would generally have been required to start Making Tax Digital from 6 April 2026, unless an exemption or exclusion applies.
If you have not yet made the necessary arrangements, you should review your position promptly, including your registration, accounting software, digital records and any outstanding reporting requirements.
The requirements are subject to applicable exemptions, and certain types of income are excluded from the qualifying income calculation.
How can Johnson Accountants help?
Johnson Accountants can help you establish when Making Tax Digital applies to you, review your existing accounting arrangements, select suitable software and prepare for the digital reporting requirements.
Whether you should already be complying or are preparing for April 2027 or April 2028, we can help you understand your obligations and the steps needed to meet them.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
You may need to report and pay Capital Gains Tax (CGT) when you sell, give away or otherwise dispose of an asset that has increased in value.
The reporting requirements and deadlines depend on the type of asset, whether a taxable gain arises and your UK residence status.
When must I report Capital Gains Tax on property?
If you are UK resident and sell a UK residential property on which Capital Gains Tax is payable, you must generally report the disposal and pay the tax within 60 days of completion.
This commonly applies to sales of buy-to-let properties and second homes where a taxable gain arises.
A sale of your main residence may be fully exempt where Private Residence Relief applies.
Different reporting rules can apply to non-UK residents disposing of UK property.
What about shares and other investments?
Gains arising from shares, investments and other chargeable assets may need to be reported through Self Assessment.
In some circumstances, you can report and pay Capital Gains Tax using HMRC’s real-time Capital Gains Tax service.
Whether a disposal must be reported depends on your circumstances, including the amount of the gain, available reliefs and the annual exempt amount. If you are already required to complete a Self Assessment tax return, you may also need to report disposals where the total proceeds exceed the relevant reporting threshold, even if no Capital Gains Tax is payable.
When is Capital Gains Tax payable through Self Assessment?
Where Capital Gains Tax is reported through Self Assessment, payment is generally due by 31 January following the end of the relevant tax year.
For example, Capital Gains Tax arising in the 2025/26 tax year and reported through Self Assessment would generally be payable by 31 January 2027.
This differs from the 60-day reporting and payment deadline applying to relevant UK residential property disposals.
How can Johnson Accountants help?
Johnson Accountants can help calculate capital gains, consider available exemptions and reliefs, prepare Capital Gains Tax reports and complete the relevant Self Assessment disclosures.
For further information, see GOV.UK – Report and pay Capital Gains Tax.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
If you receive rental income from a property, you can generally deduct certain allowable expenses when calculating your taxable rental profits.
The rules depend on the type of property, the nature of the expenditure and whether you are an individual landlord or operate through a limited company.
What rental property expenses are normally allowable?
Common allowable expenses for residential landlords include:
- Letting agent and property management fees.
- Accountancy fees relating to the rental business.
- Repairs and maintenance, provided the expenditure is not capital in nature.
- Landlord insurance.
- Council Tax and utility bills paid by the landlord.
- Advertising costs for finding tenants.
- Certain costs of replacing domestic items, such as furniture and appliances.
Expenses must generally be incurred wholly and exclusively for the property rental business.
Can I claim mortgage interest?
Individual landlords of residential property generally cannot deduct mortgage interest and other qualifying finance costs directly from rental income.
Instead, relief is normally given as a basic-rate Income Tax reduction, subject to the applicable restrictions.
Different rules may apply to companies and certain other property businesses.
Can I claim the cost of property improvements?
Capital improvements, such as extensions or substantial alterations, are not normally deductible against rental income.
However, qualifying capital expenditure may be relevant when calculating Capital Gains Tax on a future disposal.
The distinction between repairs and improvements depends on the circumstances.
What is the £1,000 property allowance?
Individuals with qualifying gross property income of £1,000 or less may benefit from the property allowance.
Where income exceeds £1,000, eligible landlords may be able to deduct the £1,000 allowance instead of actual expenses, although restrictions apply.
The property allowance cannot generally be claimed where the landlord deducts actual expenses, and special rules apply to income from connected parties.
How can Johnson Accountants help?
Johnson Accountants can help landlords identify allowable expenses, calculate rental profits, prepare Self Assessment tax returns and understand their tax reporting obligations.
For further information, see GOV.UK – Working out your rental income.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
You may have to pay the High Income Child Benefit Charge (HICBC) if you or your partner receives Child Benefit and either of you has adjusted net income exceeding £60,000 in a tax year.
The charge may also apply if someone else receives Child Benefit for a child living with you, even where neither you nor your partner receives the payments directly.
The charge is calculated by reference to the higher earner’s individual adjusted net income, rather than your combined household income.
How does the High Income Child Benefit Charge work?
For the 2026/27 tax year:
- £60,000 or below: No High Income Child Benefit Charge.
- Between £60,000 and £80,000: The charge increases by 1% of Child Benefit received for every £200 of adjusted net income above £60,000.
- £80,000 or above: The charge is equivalent to the full amount of Child Benefit received.
What is adjusted net income?
Adjusted net income generally includes taxable earnings, self-employment profits, rental income, savings interest and dividends, after certain adjustments.
Qualifying pension contributions and Gift Aid donations can reduce adjusted net income.
Who is responsible for paying the charge?
Where both partners exceed the threshold, the partner with the higher adjusted net income is responsible for the charge.
Do I need to complete a Self Assessment tax return?
Not necessarily. If you are liable to the High Income Child Benefit Charge, you may need to register for Self Assessment and complete a tax return to report and pay the charge.
However, HMRC allows eligible individuals to pay the charge through PAYE without completing a Self Assessment tax return solely for this purpose.
If you are already required to complete a Self Assessment tax return for another reason, the charge must generally be reported through that return.
Can I stop receiving Child Benefit?
You can choose to opt out of Child Benefit payments to avoid the charge.
However, remaining registered for Child Benefit can preserve entitlement to National Insurance credits towards your State Pension and ensure your child receives a National Insurance number automatically.
How can Johnson Accountants help?
Johnson Accountants can help establish whether the High Income Child Benefit Charge applies, calculate adjusted net income, consider the effect of pension contributions and Gift Aid, and assist with any relevant Self Assessment obligations.
For further information, see GOV.UK – High Income Child Benefit Charge.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
Not every small business is legally required to use accounting software. However, all businesses need to maintain appropriate accounting records, and using suitable software can make this easier.
Whether accounting software is necessary will depend on your business circumstances, the taxes you are required to report and whether you fall within the Making Tax Digital rules.
What are the benefits of accounting software?
Accounting software can help small businesses manage their financial records more efficiently.
Common benefits include:
- Recording sales invoices and business expenses.
- Connecting business bank accounts through bank feeds.
- Reconciling transactions and identifying missing entries.
- Monitoring amounts owed by customers and payable to suppliers.
- Producing financial reports to help understand business performance.
- Maintaining records needed for tax returns and accounts.
Keeping records up to date throughout the year can also reduce the work required when preparing annual accounts.
Do sole traders need accounting software?
Sole traders must maintain adequate records of their business income and expenses, but accounting software is not compulsory for every sole trader.
However, sole traders who fall within Making Tax Digital for Income Tax will generally need to maintain digital records and use compatible software to meet their reporting obligations.
The requirements depend on the individual’s circumstances and the applicable commencement dates.
Do limited companies need accounting software?
Limited companies must maintain adequate accounting records, but there is no general requirement for every limited company to use a particular accounting software package.
Nevertheless, software can help directors manage their bookkeeping, monitor their financial position and provide information for preparing annual accounts and Corporation Tax returns.
VAT-registered companies within Making Tax Digital for VAT must also meet the relevant digital record-keeping and submission requirements.
Can Johnson Accountants help with accounting software?
Johnson Accountants works with accounting software used by small businesses, including Xero, QuickBooks and FreeAgent.
We can discuss your business requirements, help you understand the available options and provide support with maintaining accounting records.
The most suitable software will depend on the nature of your business, your reporting obligations and the level of bookkeeping support required.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
Yes. Most modern cloud accounting software allows you to give your accountant access to your accounting records without sharing your own login details.
This enables your accountant to review financial information, identify potential bookkeeping issues and assist with preparing accounts and tax returns.
The level of access available will depend on the accounting software and the permissions granted.
How do I give my accountant access?
Accounting software such as Xero, QuickBooks and FreeAgent generally provides facilities for inviting an accountant or other authorised user to access your records.
The invitation process varies between software providers, but usually involves adding your accountant through the software’s user management or adviser access settings.
Your accountant can explain the appropriate procedure for the software you use.
Will my accountant be able to change my accounting records?
Depending on the permissions granted, your accountant may be able to review, enter or amend accounting transactions.
This can be useful when correcting bookkeeping errors, processing accounting adjustments or preparing year-end accounts.
It is important to understand the level of access being provided and agree who is responsible for maintaining your day-to-day bookkeeping records.
Is it safe to give my accountant access?
Using the software’s authorised user access facilities is generally preferable to sharing passwords.
You should use appropriate security measures, including multi-factor authentication where available, and regularly review who has access to your accounting information.
Access should be limited to individuals who need it for an appropriate business purpose.
Will I still be responsible for my bookkeeping?
Yes. Giving your accountant access does not automatically transfer responsibility for maintaining your accounting records.
Business owners and company directors remain responsible for ensuring that appropriate records are maintained and that relevant statutory obligations are met.
Your accountant can assist with bookkeeping and compliance, but the services and responsibilities should be clearly agreed.
How can Johnson Accountants help?
Johnson Accountants works with cloud accounting software including Xero, QuickBooks and FreeAgent.
We can explain how to provide appropriate access, review your accounting information and discuss the level of bookkeeping and accounting support your business requires.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
The best accounting software for your small business will depend on the nature of your activities, the complexity of your transactions and the accounting and tax reporting requirements you need to meet.
There is no single accounting package that is suitable for every business. Software that works well for a sole trader may not necessarily be the best choice for a limited company with employees, stock or more complex bookkeeping requirements.
What should I consider when choosing accounting software?
Before selecting accounting software, consider:
- Whether you operate as a sole trader, partnership or limited company.
- The number and type of transactions you process.
- Whether you need to issue sales invoices and track customer payments.
- Whether the software can connect to your business bank account.
- Your VAT and Making Tax Digital reporting requirements.
- Whether you need payroll, stock management or other additional features.
- The subscription cost and any charges for additional users or services.
- Whether your accountant can access and support the software.
Choosing software that meets your actual requirements can help avoid unnecessary costs and complications.
What are the differences between Xero, QuickBooks, FreeAgent and Sage?
Xero, QuickBooks, FreeAgent and Sage offer accounting software designed for businesses, although the features, subscription plans and available integrations differ.
Depending on the package selected, these products may provide invoicing, bank feeds, expense recording, VAT reporting and financial reports.
Some packages also offer payroll, project tracking, stock management or other features, either within particular subscription plans or through additional services.
It is important to compare the features available under the specific subscription plan rather than assuming every feature is included.
Do I need to choose accounting software before appointing an accountant?
No. It can be helpful to speak to an accountant before committing to a software subscription.
Your accountant can discuss your bookkeeping requirements and help you assess whether a particular package is suitable.
This may prevent you from purchasing software that is unnecessarily expensive or does not meet your reporting needs.
Can I change accounting software later?
Yes. Businesses can move from one accounting package to another, although the process may involve transferring opening balances, customer and supplier information, outstanding invoices and accounting records.
The complexity of a migration will depend on the software involved and the quality of the existing records.
It is important to plan the change carefully to preserve accurate financial information and maintain an appropriate audit trail.
How can Johnson Accountants help?
Johnson Accountants works with accounting software including Xero, QuickBooks and FreeAgent.
We can discuss your business requirements, help you assess suitable software options and provide support with bookkeeping and accounting records.
Our aim is to help you choose a practical solution appropriate to your business rather than software with features you may not need.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
Yes. Many small business owners maintain their own bookkeeping records and appoint an accountant to prepare their annual accounts and tax returns.
This arrangement can work well, provided the bookkeeping records are accurate, complete and maintained throughout the year.
The responsibilities of the business owner and accountant should be clearly agreed at the outset.
What bookkeeping can I do myself?
Depending on your business and the accounting software you use, you may be able to undertake tasks such as:
- Recording sales invoices and customer receipts.
- Entering purchase invoices and business expenses.
- Reconciling business bank accounts.
- Maintaining records of amounts owed by customers and to suppliers.
- Recording business mileage and other relevant expenses.
- Keeping supporting invoices, receipts and financial documents.
More complicated transactions may require professional accounting advice to ensure they are recorded correctly.
What will my accountant do at the year-end?
Depending on the agreed services, your accountant may review your bookkeeping records, identify necessary accounting adjustments and prepare annual accounts and tax returns.
This may involve checking balances, reviewing transactions and requesting additional information to ensure the accounts are prepared appropriately.
The extent of the review will depend on the agreed engagement and should not be confused with an audit.
Will doing my own bookkeeping reduce my accountancy fees?
It may do.
Maintaining accurate and complete bookkeeping records can reduce the amount of work your accountant needs to undertake.
However, where records contain errors, missing transactions or unreconciled balances, additional work may be required before the accounts and tax returns can be completed.
The quality of the bookkeeping is therefore often more important than simply entering the transactions yourself.
Can my accountant check my bookkeeping during the year?
Yes. Depending on the services agreed, your accountant may be able to review your records periodically rather than waiting until the year-end.
Regular reviews can help identify bookkeeping issues earlier and reduce the risk of unexpected adjustments when preparing annual accounts.
How can Johnson Accountants help?
Johnson Accountants can work with businesses that maintain their own bookkeeping records using accounting software such as Xero, QuickBooks and FreeAgent.
We can discuss how responsibilities should be divided, what records you need to maintain and the level of accounting support appropriate for your business.
Our aim is to help you maintain reliable accounting information while ensuring that the services provided reflect your requirements.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
All businesses need to maintain appropriate accounting records to support their financial transactions, prepare accounts and meet their tax obligations.
The records you need to keep will depend on whether you operate as a sole trader, partnership or limited company, as well as the nature of your business activities.
Maintaining accurate and organised records throughout the year can make bookkeeping easier and help avoid problems when preparing accounts and tax returns.
What financial records should I keep?
Depending on your business, you should generally retain records such as:
- Sales invoices and records of income received.
- Purchase invoices, receipts and business expenses.
- Business bank statements and transaction records.
- Details of payments received from customers and made to suppliers.
- Records of business mileage and travel expenses.
- Payroll records and payments to employees.
- VAT records and supporting documentation, where applicable.
- Details of business assets, loans and other financial transactions.
You should also retain relevant contracts and other documents supporting your accounting entries.
Can I keep my accounting records electronically?
Yes. Accounting records can generally be maintained electronically, provided they are accurate, accessible and retained for the required period.
Cloud accounting software can help organise transactions, invoices and supporting documents.
Businesses within Making Tax Digital must also comply with the relevant digital record-keeping requirements.
Simply storing documents electronically does not necessarily mean that all Making Tax Digital requirements have been satisfied.
How long must I keep my business records?
The retention period depends on the type of business and the relevant tax or statutory requirements.
For example, limited companies are generally required to retain accounting records for at least six years from the end of the financial year to which they relate, although longer periods may apply in certain circumstances.
Self-employed individuals generally need to retain records for at least five years after the 31 January Self Assessment filing deadline for the relevant tax year.
Different requirements may apply to VAT, payroll and other records, so businesses should check the rules relevant to their circumstances before disposing of documents.
What happens if my records are incomplete?
Incomplete records can make it more difficult to prepare accurate accounts and tax returns.
Your accountant may need to request additional information, investigate missing transactions or undertake extra bookkeeping work.
Poor record-keeping can also create difficulties if HMRC requests evidence supporting figures included in a tax return.
How can Johnson Accountants help?
Johnson Accountants can advise small businesses on the accounting information they need to maintain and how to organise their records.
We work with businesses using accounting software such as Xero, QuickBooks and FreeAgent and can discuss the level of bookkeeping support appropriate for your circumstances.
Maintaining good records helps make the preparation of accounts and tax returns more straightforward and can reduce unnecessary administrative work.
This FAQ is provided for general information only and does not constitute professional tax advice. Tax rules and thresholds may change, and their application depends on individual circumstances. You should seek advice specific to your circumstances before taking action.
