Questions that every business owner should ask their accountant
Your accountant is far from just a number-crunching machine! They have specialist knowledge regarding taxes, expenses, allowances and so much more.
In this blog, we’ll outline some of the key questions that you should be asking your accountant to ensure your business is as efficient as possible.
Can I make use of digital tools?
If you’re not already using an accounting software such as QuickBooks, Xero and FreeAgent, you’re missing out on the world of digital convenience! These tools allow you to scan all of your expenses and other accounting records and upload them into the cloud.
Not only does this help towards becoming Making Tax Digital compliant, but your accountant will also be able to access them at any time, allowing for much greater efficiency. Plus, you can sort all of your records and easily find specific items, so no more digging through endless filing cabinets looking for receipts!
Each accounting software is different. The one that will be most suitable for your business will depend on what type of transactions you make and how often you make them. If you’re unsure which one is best for you, your accountant will be able to recommend one based on your specific business.
Am I prepared for Making Tax Digital?
The government’s Making Tax Digital (MTD) process is designed to modernise the UK tax system. Currently, all VAT-registered businesses should already be keeping digital records and filing returns through MTD-compatible software, such as the ones we touched on earlier.
However, MTD is expanding to include Income Tax Self Assessments (ITSA), which means that eventually, all sole traders and property owners will also need to switch over to digital records and quarterly submissions to HMRC.
There is still some time before these changes take effect. By April 2026, sole traders and property owners with earnings over £50,000 per annum will need to comply, with that being extended to those earning over £30,000 per annum by April 2027.
Are you prepared for these changes? At Vantage, we offer dedicated MTD support and software solutions to make the transition seamless.
How can I improve cash flow?
Keeping a close eye on the cash flow of your business is crucial to ensure long-term success. Without proper cash flow management, you will struggle to recover from any unexpected financial setbacks that may arise. Thankfully, it’s easier than ever to stay on top of your business finances with the help of online accounting software.
All your expenses and transactions can be logged in these systems, allowing for real-time access to a comprehensive overview of your accounts. This lets you and your accountant analyse the data and spot any concerns before they cause any major problems.
Your accountant will be able to offer expert advice on your business’ specific circumstances and what your best options are given your current financial situation. They can also create a cash flow forecast, giving you greater insight into what the future of your company’s finances might look like.
With this knowledge, you can plan more effectively, create better budgets and stay organised, meaning you’ll be ready for any temporary shortfalls, or external shocks. Similarly, you’ll also know when it’s the right time to invest in growing your business.
How will the new Basis Period Reform affect me?
HMRC is reforming how unincorporated businesses’ profits are allocated to tax years. The changes will mean that a business’ profit for a tax year will consist of all the profit arising in that tax year, irrespective of the accounting date. To make this happen, HMRC has made the 2023/24 year a catch-up year, which may result in increased tax liabilities being brought forward.
This will affect all unincorporated businesses that do not have their accounting date aligned with the end of the tax year (31st March/5th April). Limited companies will be unaffected.
Your accountant can help you prepare for any potential tax increases and can explain the option of changing your accounting year end to be in line with the tax year.
Am I claiming all allowable expenses?
You can claim allowable expenses for items that are exclusively for the purpose of running your business. The list of what is considered allowable will depend on your industry/speciality and business structure. Some examples of allowable expenses include:
- Travel costs
- Buying stock/raw materials
- Staff costs
- Website development
- Heating, lighting, and electricity for your business premises
Having a conversation with your dedicated accountant is the best way to find out all the allowable expenses you can claim. For more information about allowable expenses, see our guide here.
How Vantage Accounting can help
If any of these questions have stuck out as something you want answers to, contact your dedicated business accountant today. Not yet a Vantage client? Get in touch with us today to see how we can help your business.
Note: All the information and advice in this blog post was correct at the time of writing.