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No more trips to the sorting office
Roughly once per month, we end up making a trip to the local sorting office to collect our mail. When we can catch cases like this one (at the time of delivery) we have paid the surcharge and accepted that these instances are just one of those facts of life . . .
Some people still send us paper, and they sometimes put a regular stamp on a large envelope. Never mind! With our move to new premises (see the blogpost below) we now have a concierge (during office hours) who can sign for important mail. However, if we miss a letter like the one above and it finds it’s way back to the sorting office, we may just leave it there in future! It’s not the price that Royal Mail charges us, it’s the time we waste making the 30 minute round trip.
We are changing our terms and conditions to explicity account for this sort of situation. If a letter like this is not collected from a sorting office within 3 weeks, then Royal Mail will return it to the sender, even if they have to open the letter to get your address. So be it!
Please send us digital documents whenever possible, or send letters (using our new address) with the right amount of postage. Thanks!
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Posted on 19 Jul 2010 by The Proactive Accountant Dot Com
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Be sure to select the right service
This information has moved . . .
http://www.bookkeeper140.com/?page_id=53
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Posted on 6 Apr 2010 by The Proactive Accountant Dot Com
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Updating our systems
When a new company is incorporated, both the Revenue and Companies House will issue reference numbers. This may take between 14 and 28 days. In order to submit documents electronically, we need to ask you to let us know the reference in each case.
HM Revenue & Customs call it a Unique Taxpayer Reference or a UTR, or sometimes just a reference. Companies House talk about an authentication code. Examples of the tax office form and the Companies house letter are shown below. In each case, please let us know the reference or code. We don’t need the letter, just a simple email with the reference or code, thanks.
Once we have the reference number from the form CT41G we will complete the form using our own electronic proforma, and submit it on your behalf. You need not do anything with the original paper form. Put it in the confidential waste!
If you get too many letters from HM Revenue & Customs and Companies House, and you need any help please let us know.
Posted on 5 Dec 2009 by The Proactive Accountant Dot Com
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A High Level Overview
In simplistic terms, this diagram sets out the flow of information. With sufficient information at every step in the process, things work beautifully.
We’d like to be able to help you to keep things this simple!
The quarterly and the annual checklists set out the types of records that are needed.
Posted on 1 Nov 2009 by The Proactive Accountant Dot Com
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Companies House and HM Revenue & Customs use different systems
Each year, different reports have to be submitted to different Government departments.
The Companies House Annual Return
The Companies House Annual Return is a report which sets out a list of the Directors, Company Secretaries and Shareholders of a UK limited company. It also shows the registered office address. The form is due once per year and normally, the reporting date is on the anniversary of incorporation, and the due date is 28 days after that.
The HMRC Corporation Tax Return
The HMRC Corporation Tax Return normally accompanies the annual trading accounts. Accounts in an abbreviated form are due at Companies House nine months after the end of a trading period. The Corporation Tax Return and a copy of the full accounts are due at HMRC twelve months after the end of a trading period.
That means that the accountant may end up working on different reports at different times of the year and with different deadlines!
Posted on 31 Oct 2009 by The Proactive Accountant Dot Com
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Pretending you’re an employee again!
If you have ever been employed and had to submit expense claims, you will be familiar with this process. Now that you’re a director of your own limited company, you need to follow the same sort of process that regular employees have to follow. It’s done this way, because you are trying to keep corporate matters corporate and private matters private!
The best thing would be to get all your suppliers to bill the company directly, and get the company to pay them directly. If that could be done, you would never have to fill out an expense claim form! However, try asking your taxi driver to invoice your company! It doesn’t work like that! And so you end up paying for things like taxis out of your own cash. And remember, we are talking about business expenses only here, so I expect that this particular taxi journey was a visit to a business client?
Keep the receipts for all of the things that you buy personally, on behalf of your business. Then once a month (or perhaps at some different interval) fill out a claim form and get the company to reimburse you. If there is ever a records inspection by the tax office, they will want to see the claim forms with the receipts attached, and they will also check that the reimbursements on the company bank statements match the amounts claimed on the expense forms.
Motor expenses
We recommend that mileage is claimed at the HMRC approved rate. That’s currently the FPCS rates and these have been the same for several years up to and including 2009/10.
- 40p per mile - first 10,000 miles per year
- 25p per mile - additional miles
No other motoring costs are to be claimed. The FPCS rates from HMRC are calculated by the AA so as to cover all the conceivable running costs of having a car! That means that you have to keep a log of all of your business journeys in your own car.
Non-VAT Registered Businesses
Use two forms, one form for mileage and just one form for all other business expenses. Separate the receipts by category and claim back the gross amount including VAT. Use the non-VAT form in the samples below, and just put all the figures on that.
VAT Registered Businesses
Use three forms, one form for mileage and two separate forms covering business expenses with VAT and business expenses without VAT. It’s easier if you separate your receipts first according to whether they have VAT on them or not. Then categorise them and claim them back on the relevant form.
The VAT on fuel can be reclaimed, but beware that the total fuel costs may be less than the total claim for mileage. You can only claim back actual VAT incurred, and not notional VAT based on the HMRC rate. That’s why the mileage figure is normally split at the foot of the mileage claim form and then apportioned between the VAT claim and the non-VAT claim forms.
As a director/employee you are claiming back all of the gross amounts including VAT. It’s the book keeper who needs to know which items include VAT and which ones don’t. And that’s why there are three different forms for VAT registered businesses.
Book keeping and sample forms
If you are doing your own book keeping, use the totals at the foot of each column and post them into your software. To download a sample form (MS Excel) right click on the link and select “save as” . . .
Mileage Claim
Non-VAT Expenses
VAT Expenses
These general purpose forms may need to be adjusted to suit your business. Once you have them in a format which you are happy with, we recommend that you stick with that! That way, you and your staff will become accustomed to the process.
Expenses in the first month or two
What normally happens to a new business, is that you have expenses which you want to reclaim, before you have any funds to pay them. There are two ways to handle this dilemma.
- Wait until the business can afford to make the reimbursement.
- Introduce working capital (of your own) into the business, and then reimburse yourself!
That second one sounds odd, but at least you build up the bank transactions that you’re looking for. Over the course of the financial year these movements of capital accumulate and are shown in the annual accounts as a loan from the director to the company. Take care, because capital movements can sometimes work the other way. If you take too much capital out of the company, the loan is the other way around and there can be adverse tax consequences.
Posted on 21 Oct 2009 by The Proactive Accountant Dot Com
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How safe is e-mail?
If you didn’t already know, the Mail Server at Proactive is a business service that we buy from Yahoo. We pay for it and we have Yahoo Biz Mail, or we did have! It has served us well since we founded our business in 1997. However, this year the Yahoo portal has been undergoing changes.
The changes in isolation have been relatively minor, but each one has been adding up. The web interface keeps changing, and so we have the FLAG set to “Classic” view. That ensures a consistent approach to our management of our own e-mail. Although since mid August 2009, the “archive” facility has disappeared, and the “filter” process has changed beyond recognition. And even Yahoo’s “Classic” view has changed on account of new ways of working.
Enough is enough! This week’s news (6 Oct 2010) that many webmail usernames and passwords have been published on the web . . .
BBC News - Google, Yahoo, Hotmail and AOL
. . . has led us to implement our plans for 1 Jan 2010 a little sooner than anticipated. We were planning a shift anyway, and it is now happening today, 10 Oct 2009. That means that the two current Web Servers and the old one from 2008 (which is in “run off” anyway) are being retired with immediate effect.
Please follow the instructions in the e-mails that are being sent out from Monday 12 Oct 2009, and delete any addresses you have for us which end in . . .
- proactive2008.com
- proactive2009.com
- tpamail.com
Our new web server is a commercial service hosted at www.proactive.ly and it was set up on Wed 7 Oct 2009. That was the day we found out about the phishing attack. Our new system will be in full swing from Monday 12 Oct 2009 and all of the usernames and passwords are new and secure.
We believe that the new system is going to be as bullet proof as they come! Need to contact us now? Please use . . .
team AT proactive.ly
Posted on 10 Oct 2009 by The Proactive Accountant Dot Com
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What’s going to happen when they strike?
The news this week warns us that there is going to be a national strike from 18 Oct 2009 at Royal Mail. As a result, Royal Mail is losing more goodwill, and some of its key customers are moving elsewhere . . . as news stories like this one about Amazon and Argos demonstrate . . .
The Guardian News Report
Some staff at Royal Mail, particularly delivery staff in central London, have been staging wildcat strikes since early August. As a result, documents sent to us at Proactive have not necessarily arrived. We first noticed a deterioration in the Royal Mail service about three years ago, and on 1 Jan 2007 we implemented a policy of sending all of our letters (addressed to such places as HMRC and Companies House) by Recorded Delivery or Special Delivery.
That was intended to combat protestations by these government departments that they “had not received” the letters. Our stats over the past three years demonstrate that in part they were right. In spite of press releases from Royal Mail, we know categorically that around 20% of our Recorded Delivery and Special Delivery letters are never signed for. A fraction of that 20% evidently do reach their destination, because we receive replies, but most of them do not and we end up spending time trying to remedy problems.
And as Sod’s Law would have it, it is always the most sensitive items that are lost. It can be particularly time consuming when (for example) we have to convince HMRC that time sensitive documents (such as accounts, or an appeal) were actually submitted within the legal time limit. Our defence is both evidenced and is within the parameters of “reasonable excuse”, but that does not make the exercise any less time consuming.
So things will need to change!
We already use e-mail and electronic submission as much as possible, and we now intend to implement a zero Royal Mail policy. The HMRC online system for accountants is a practice management system, and it is not the same thing as the service that individual taxpayers can sign up for. We are pleased to say that the system is surprisingly good, but as with anything there are exceptions.
We have sometimes had to remedy electronic submission problems by arranging hastily agreed meetings to have paper documents signed, and then delivered by hand to either Companies House or to a local HMRC tax office. We are fortunate that central London has both a branch of Companies House and our own City 2 tax office. Each of them are within easy reach of our London office. We ended up working on 31 August 2009 (the bank holiday Monday) because the electronic submission process failed, and the accounts for two of our corporate clients were then printed and signed, and hand delivered on time.
The Revenue still don’t know that they have those accounts and we are currently going through the appeals process. The actual documents are probably somewhere between the post room at City 2 tax office, and the bod who actually has to log their receipt onto the system!
Whilst we have a local VAT office in Islington, we cannot hand deliver VAT returns there. The system requires VAT returns to be submitted either by mail to the VAT controller in Yorkshire, or electronically. We have access to fewer cases on the VAT system than on the HMRC system. Although these two government departments were merged about two years ago, they still have two separate computer systems, and accountants have to log into them as separate activities. An “authority to act” on one does not automatically mean an authority to act on the other.
So, what can be done about it?
Over the next few weeks we are implementing a campaign to have all clients set up on all government systems. We do not want to have to drive to Yorkshire, or send a courier there with a VAT return! We are also aiming to move away from the routine of handling paper records and will be encouraging all business clients to adopt one of three methods of handling accounts electronically, being . . .
- spreadsheets
- proprietary book keeping software
- online book keeping portals
We will soon be releasing news about each of these three approaches!
Posted on 10 Oct 2009 by The Proactive Accountant Dot Com
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The 1 Oct 2009 changes
The Companies Act 2006 led to a number of changes in company law, some of which were implemented on 1 October 2008, and some of which came into force on 1 Oct 2009.
The latest changes meant that Companies House had to upgrade their computer software and accountants were warned in advance. We knew that the electronic services would be unavailable from Thursday 1 to Sunday 4 October 2009 inclusive. We then expected them to be working normally on Monday 5 October 2009. They didn’t, as this set of comments on Accounting Web will tell you . . .
Accounting Web Comments
As we write this on Saturday 10 Oct 2009, Companies House still has an enormous backlog of work. Typically, at Proactive, we pick up instructions from a new client about once a week to have a new company incorporated.
That happened on Friday 2 Oct 2009 and (as usual) we telephoned our solicitors with whom we have been working for over 10 years. They take the instructions over the phone, and have a direct link to Companies House. On a normal day, any new “incorporation” submitted electronically before 3.00pm will be processed the same day. On account of the upgrade, we were advised on Friday 2 Oct that the incorporation would probably take place on Monday 5 October. As of Friday 9 October that new company has still not yet been formed.
The new client needs to follow all the correct protocols before signing a new contract with a customer, we need to keep abreast of the needs of all clients, both old and new, and the botched upgrade at Companies House has been an unwelcome distraction this week. We actually have a number of clients in the field of IT and our contact at Companies House told us this week that it has been a case of “one step forward, two steps back”. They are working at Companies House this weekend to overcome bugs, and we are also working this weekend at Proactive to overcome the backlog caused by three external distractions (see the three blog posts dated 10 Oct 2009) which have occurred concurrently.
Thank you for your patience!
Posted on 10 Oct 2009 by The Proactive Accountant Dot Com
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The simple case of a “one-man” or family company
Once you have decided that a company is no longer needed, it can easily be dissolved. You must first ensure that the accounts and corporation tax return for the final period of trading have been submitted and that any tax liability has been paid.
If there is a tax repayment for the final year, you will want to have received that before you close the bank account and dissolve the company. If a company still has money in a bank account on the date of dissolution, you will forfeit that money and it is sent to the government’s Solicitor General. It is a nightmare to get a company reinstated and then recover money from the Solicitor General. So we recommend that you complete your finances first and only then, dissolve your company.
This is one of those exercises that Companies House still does on paper rather than electronically. Download a copy of the dissolution form from here. And if you need a continuation sheet it’s here.
Step 1
Print off the form DS01. Fill in your company number and name and then have each director sign and date the form. Take a photocopy for your records.
Step 2
Prepare a cheque for £10 made payable to “Companies House”.
Step 3
Send the signed form and the cheque by Recorded Delivery directly to:
Companies House
Crown Way
Cardiff
CF14 3UZ
Make a note of the Recorded Delivery slip number and let your accountant know the number and the date of posting. That allows us to log this into the system and keep tabs on Companies House!
Step 4
The whole dissolution process has to allow for notices to be published in the London Gazette over a 3 month period. It normally takes around 4 to 6 months to have a company dissolved. Once the process has been started, no more forms should be sent to Companies House for this particular company. If that happens, it will delay the dissolution process, because they effectively start the whole thing again!
If you need further advice, please contact us
Posted on 6 Oct 2009 by The Proactive Accountant Dot Com
