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Accounts, tax, bank accounts - eeek, what do you need to know as a wedding business? · Wedding Pros who are ready to grow - with Becca Pountney

• 0:00
  Becca: Today's podcast episode is gonna be a little bit different.
• 0:03
  In today's episode, I'm digging into the wedding pro members' lounge archive.
• 0:07
  Every month in the members' lounge, I bring in the best experts to
• 0:10
  teach my members so that they are always stay ahead of the game.
• 0:13
  Inside the club, there's a library of over 50 training videos, and today I've
• 0:17
  dug into the archives and I'm bringing you a training from back in 2019.
• 0:20
  In this session, I interviewed my own accountant, Emma Bail, from
• 0:24
  Evolve accounting to ask her all the ins and outs of what we need
• 0:27
  to know as small business owners.
• 0:29
  The little questions that sometimes we just don't know the answer to.
• 0:32
  To warn you, this was recorded three years ago, so the sound quality
• 0:36
  isn't as good as usual, but the information makes it worthwhile.
• 0:39
  So just bear.
• 0:41
  If you need help to grow your wedding business with access to my knowledge
• 0:44
  and my expert training sessions, then do check out my Wedding Pro member's lounge.
• 0:48
  At only 20 pound a month is an absolute bargain and really great value to help
• 0:52
  you always stay ahead of your game.
• 0:53
  The link is in the show notes.
• 0:55
  Enjoy today's episode back from 2019 where I talk to my accountant, Emma.
• 1:02
  I'm Becca Pountney, wedding business marketing expert, speaker and blogger,
• 1:05
  and you are listening to The Wedding Pros who are Ready to Grow podcast.
• 1:09
  I'm here to share with you actionable tips, strategies, and real life
• 1:13
  examples to help you take your wedding business to the next level.
• 1:16
  If you are an ambitious wedding business owner that wants to take your passion
• 1:20
  and use it to build a profitable, sustainable business doing what you
• 1:24
  love, then you're in the right place.
• 1:26
  Let's get going with today's episode.
• 1:29
  Hi Emma.
• 1:30
  Thank you so much for coming and joining us in the members club this morning.
• 1:34
  We're really excited, um, to have you.
• 1:36
  I know people have been looking forward to the session a lot, so I
• 1:39
  just wanna be helpful if you just introduce yourself, tell us who you
• 1:42
  are, what you do, where you work.
• 1:45
  Emma: Um, so my name's Emma Bail, I am a co-owner for a small accountancy
• 1:49
  practice based in Wyboston near St.
• 1:51
  Neots.
• 1:52
  My husband and I run it and we have, uh, part-time Louise who works with us.
• 1:57
  We, we've been going about five years, although I've been an accountant for over.
• 2:01
  20 years, which makes me seem really old.
• 2:03
  Um, we specialize in small business, so Exactly.
• 2:06
  People like you and actually people like us.
• 2:08
  So, um, a lot of our clients are, um, mums who have, uh, chosen to, to start
• 2:14
  their own businesses after having their children or people who have chosen to
• 2:18
  move away from more traditional work and, and freelance or have their own small.
• 2:23
  Fab
• 2:24
  Becca: so you are the right person for us to be talking to, because we
• 2:26
  are all small business owners and I know because I've worked with you
• 2:30
  before, that you keep everything really simple as well, which is what we like
• 2:33
  about you don't make it complicated.
• 2:35
  So I'm gonna go straight into the questions we've got.
• 2:38
  As I said, if any of you've got extra questions as we go along
• 2:40
  or comments, please leave them.
• 2:42
  Um, and I will keep an eye on them as we go through.
• 2:45
  So, First question, let's keep it really basic to start with.
• 2:50
  What records should we be keeping, if any at all?
• 2:53
  Emma: Please do keep records . So.
• 2:56
  It's income and expenditure for your relating to your business.
• 2:59
  So the records of anything that you sell.
• 3:01
  So that could be copies of invoices that you give to clients or if you
• 3:05
  are dealing in cash, you might have a cash receipt, but, but as much
• 3:08
  detailed record as you can on the income you receive for your business.
• 3:11
  And then also business related expenses.
• 3:13
  So anything that you purchased directly related to your business, that could
• 3:17
  be, you know, if you make chairs, that would be the wood and the nails
• 3:20
  that you buy to make your chairs.
• 3:22
  If you provide a more service type business, then that could
• 3:25
  be your laptop, stationary maybe software, things like that.
• 3:30
  So anything that's related directly to your business.
• 3:34
  You need to keep your receipts, um, either electronically or in paper form.
• 3:38
  Um, hmrc like you to keep those for seven years so that you can prove what you've
• 3:42
  earnt and what you've, what you've bought.
• 3:45
  And there's lots of different ways that you can keep those records.
• 3:47
  You can either have a sort of very paper based way of doing that, or
• 3:50
  you can be a bit more clever about it and have a more electronic, But
• 3:53
  the most important thing is to keep for everything that you purchase and
• 3:56
  everything you sell, to keep some sort of record receipt hard, copy yourself
• 4:00
  to prove that that transaction happened.
• 4:04
  Becca: Perfect.
• 4:04
  So we should be keeping everything for seven years.
• 4:07
  Yes.
• 4:08
  . Wow.
• 4:08
  Okay.
• 4:08
  That's good to know.
• 4:10
  I've got mine, I promise.
• 4:11
  Right.
• 4:12
  Okay.
• 4:13
  So next question.
• 4:14
  This one always throws people off.
• 4:16
  So what is the difference between net profit and gross profits?
• 4:21
  Emma: Ah, I love this question.
• 4:22
  So that can kind of slightly depend on what business you're in, um,
• 4:25
  what's included in net and gross.
• 4:27
  But we'll use a really easy example.
• 4:29
  So if you make chairs, You will sell your chairs to your customers, but
• 4:33
  you will have, um, materials that you need to purchase to make your
• 4:37
  chairs, and that would be wood, nails and maybe you might employ someone
• 4:41
  direct labor to make those chairs.
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  So your gross profit would be your sales less.
• 4:46
  Those costs of those sales would give you gross profit.
• 4:51
  Then you take away your overheads.
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  Overheads are things like rent rates, um, you know, electricity.
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  The office running costs, so your computers, your software, your
• 5:01
  stationary, all of those things, and that brings you down to your net profit.
• 5:05
  So your gross profit is everything that directly relates to your sale.
• 5:09
  Net.
• 5:09
  Net profit includes those overheads, which are the
• 5:12
  overrunning costs of your business.
• 5:15
  So the theory is if you have no sales, you would have no cost of sale, but you would
• 5:20
  still have those overheads because you'd still need to pay your, you know, your
• 5:23
  rent and your electric and your overheads.
• 5:25
  And that's how it works.
• 5:26
  Becca: And which one should we be paying the closest attention?
• 5:30
  Emma: Both.
• 5:30
  Um, and, and so what I like to do is look at a percentage on both your gross profit.
• 5:35
  You can work out a percentage, so your gross profit divided by your sales,
• 5:39
  and you can compare that year to year.
• 5:41
  That's why it's really nice building up nice sets of accounts that are, that
• 5:44
  have a good enough amount of detail because you can see if that gross
• 5:47
  profit percentage is going up or down.
• 5:50
  So what sometimes we see, thinking about our chair manufacturer, we
• 5:53
  might see that, that the sales.
• 5:55
  Perhaps, but that the gross profit margin goes down.
• 5:58
  And so actually it, they might have lost control of their costs.
• 6:02
  Um, so suddenly they're, because they're really busy and they're making
• 6:05
  loads of extra sales, they're not paying attention to where they're
• 6:08
  buying their wood and nails from, and those costs are increasing.
• 6:11
  So for every pound of sale, they're not getting the same amount of gross profit.
• 6:15
  So that's a really important.
• 6:18
  , but that net profit's really important as well because that's showing
• 6:21
  where your overheads are going.
• 6:23
  Is your electricity going up?
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  Are you spending too much money on stationary and it's that net profit
• 6:28
  that's gonna give you a better indicator of how much tax you're gonna pay.
• 6:32
  Okay,
• 6:32
  Becca: perfect.
• 6:32
  That's really helpful.
• 6:33
  Thank you.
• 6:34
  Okay.
• 6:34
  Now lots of people in the members club, um, have another job as well,
• 6:38
  either full-time or part-time.
• 6:40
  So how does that affect their account keeping
• 6:43
  Emma: so it doesn't affect your, your business accounts at all?
• 6:46
  Um, your pa y e work.
• 6:48
  It's not included in your business account, so we still
• 6:50
  do your sales less your costs, bringing you to your net profit.
• 6:54
  But when we come to calculate your tax, we will also include any other income that
• 6:58
  you receive, you know, from your part of full-time job that you're doing, P A Y E.
• 7:02
  We'll combine all of those.
• 7:04
  Um, incomes together, calculate how much tax you need to pay on the
• 7:08
  total income, then with less any tax that you've already had deducted.
• 7:12
  And if you're on a PAYE scheme, if you are, if you are in employment
• 7:15
  somewhere else, they may well have deducted tax and then it'll be that
• 7:18
  balance at the end that you have to pay.
• 7:20
  So, effectively, you are just paying tax on the extra income
• 7:23
  you've received from your.
• 7:25
  . Becca: Okay.
• 7:25
  And if we have an accountant, presumably they help us or that, I mean, they, I mean
• 7:31
  Emma: from a very practical point of view what you need to do is you, you,
• 7:34
  you, you'll keep your business records as we've just talked about, but you'll
• 7:37
  also give your accountant, hopefully me, your, your P 60 or your P 45.
• 7:42
  So your P 60 is a document your employer gives you at the end of the year, which
• 7:47
  is a total of everything you've earned and anything that they've deducted in tax.
• 7:52
  P 45 is if you've left a, um, an employer during the year, they'll give you your
• 7:56
  P 45 when you leave, and that again, will be a summary of how much they
• 8:00
  paid you and how much tax is deducted.
• 8:02
  So you'd give those documents along with your business records to your
• 8:06
  accountant, and then the, the calculation that I've just described would,
• 8:09
  would be done to make sure you're not paying any more tax than you have.
• 8:13
  . Becca: Perfect.
• 8:13
  Thank you.
• 8:14
  That's really helpful.
• 8:15
  Okay, so we talked at the beginning about the fact we need to keep records.
• 8:18
  So have you got any practical tips about how should, how
• 8:21
  should we keep our records?
• 8:22
  How should we keep track of spreadsheet?
• 8:23
  What should we be doing?
• 8:25
  Emma: It, it, it, there, there's two things that drive this.
• 8:28
  How techy you are and, and how big your business is.
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  So if you are a fairly low tech person, you're not really into spreadsheets
• 8:36
  or softwares, but your business is quite small, then you would, you would
• 8:40
  completely get away with a folder.
• 8:42
  Um, with some dividers in it.
• 8:44
  And you'd have one section for your bank statements, one section for records of
• 8:48
  your income and one section for, you know, all your receipts for your expenses.
• 8:53
  And I've got, I would say probably 40, 50% of my clients work on that
• 8:56
  basis and it works really well.
• 8:58
  And once a year they come to my office with their folder with everything
• 9:01
  in it, and then we do the techy stuff, we enter it into software
• 9:04
  for them and do the bookkeeping.
• 9:06
  And that works really.
• 9:08
  If your business is a bit bigger and you have a higher number of transactions,
• 9:12
  you might find that a bit difficult to keep track of, um, you might
• 9:16
  want to then move to a spreadsheet based, uh, bookkeeping system.
• 9:19
  So, and there's lots of different ways we can do it, and I can, I provide templates
• 9:23
  to my clients for those who want one.
• 9:25
  But really you still need to keep that the paperwork that we've talked about
• 9:28
  in the folder, but then you'd also enter that information onto a spreadsheet, all
• 9:32
  of your sales, less all of your costs.
• 9:35
  The good way about, the good thing about doing that is then you yourself can
• 9:37
  keep a bit of a track throughout the year of how much profit you're making.
• 9:41
  It's not gonna be the exact accounting profit that your accountant's gonna
• 9:44
  come up to at the end of the year because they'll do some accounting
• 9:46
  adjustments, but it'll give you a rough idea so you'll know if.
• 9:50
  Any money and you'll be able to have roughly a bit of an idea how much
• 9:53
  tax you need to be putting away.
• 9:55
  So spreadsheets for that smaller business can, but, but that's maybe
• 9:59
  a little bit too big to just have a paper based system works really well.
• 10:03
  As you get bigger, you might start to think about, um, software.
• 10:07
  So the more transactions you've got, the more kind of unwieldy or gets and you can
• 10:10
  end up with, you know, I've got clients who sort of turn up quite often builders
• 10:14
  turn up with a bin bag full of receipts.
• 10:16
  Um, you know, and it can take me a day to sort them out.
• 10:18
  Those sorts of clients really should be doing their, their, their record
• 10:21
  keeping on, on some sort of software.
• 10:24
  Um, and again, it really depends how techy you are.
• 10:27
  There's some really complicated softwares out there.
• 10:28
  There's some really user friendly stuff.
• 10:32
  Um, but really it's about inputting that information into the software and
• 10:36
  then your accountant will be able to log in and kind of police that and check
• 10:39
  that you're doing everything right and pull the information off that you need.
• 10:42
  and which
• 10:43
  Becca: software would you recommend?
• 10:44
  Would you, have you got anything that you think's better for small businesses?
• 10:48
  Emma: It really depends on you as a business.
• 10:50
  There's lots of great software out there and, you know, I could, we could
• 10:53
  talk about this for, you know, we could do a whole separate hour on software.
• 10:57
  A lot of it depends on your business and what your requirements are.
• 11:02
  I like zero.
• 11:03
  Um, zero has become very fashionable recently.
• 11:06
  Um, I like zero because it's web based.
• 11:09
  And what's great about that, it means that you can access it anywhere.
• 11:12
  You can access it on your phone, um, you can access it on your laptop.
• 11:16
  Um, as your accountant, I can log in and access it so we
• 11:19
  can have a phone conversation.
• 11:20
  We're both looking at the numbers together and you can get lots of reports off it.
• 11:24
  Um, so I really like Xero from that point of view.
• 11:26
  It is quite user friendly.
• 11:29
  and I'm actually just about to become a Xero partner, which means I'm
• 11:32
  doing some extra training with Xero to make sure I'm, you know, extra
• 11:36
  knowledgeable in that particular software because I really like it.
• 11:39
  But that, that's just a personal preference.
• 11:41
  QuickBooks is a good, it's a really good bit Kit as well, and
• 11:44
  works very similarly to Xero.
• 11:46
  Um, it's been around on the market a lot longer than Xero.
• 11:51
  And it worked in a very similar way.
• 11:53
  It is web based, so you can log onto it wherever you are.
• 11:56
  I could log onto it too as your accountant and we can both look at it together.
• 11:59
  Um, How you choose between the two, it kind of then becomes a
• 12:04
  little bit more business specific.
• 12:06
  Um, I personally think the Xero stock management system is a
• 12:10
  little bit better than zero.
• 12:12
  So if you were my client and you had a lot of stock, maybe you were a wedding dress
• 12:16
  shop, you know, I might say maybe zero's gonna work for you a little bit better.
• 12:20
  But that, again, that's more of a personal preference.
• 12:22
  So, you know, we'd look at those two bits of software together.
• 12:25
  There's also some much cheaper software out there.
• 12:27
  There's things like kpm and you know, various different softwares like that.
• 12:30
  If you want to go a little bit lower cost, and if your business isn't too
• 12:34
  complicated, if you haven't got high levels of stock, if you haven't got,
• 12:37
  you know, those sort of, um, more complicated, uh, transactions that you
• 12:41
  need to record, then you might not.
• 12:44
  Feel that you need to invest in, in them in Xero or in QuickBooks.
• 12:47
  And also with a lot of these softwares, they have different levels.
• 12:50
  So they'll, most of them will have a basic free or very cheap, um, version,
• 12:54
  and then a sort of mid range one, which most people use, and then a sort of
• 12:58
  more expensive, much more complex one if your, if your business needs it.
• 13:01
  Um, so it's really about sort of shopping round, figuring out what
• 13:03
  it is that you need and seeing which of those softwares fit in with you.
• 13:07
  Becca: Perfect.
• 13:08
  That's really helpful.
• 13:09
  Someone's commented, I can't see who it is, but they've said, Emma,
• 13:12
  Don't bring all my receipts in a bin bag when I met with her.
• 13:15
  So , it's clearly someone that's pin to me with you, me
• 13:19
  Emma: Don't, bring all your receipts to me in a bin bag.
• 13:21
  I've got, I always say this, I've got a couple of clients, they're
• 13:23
  always builders, Bless them.
• 13:25
  They're always sort of my best and my worst clients at the same time.
• 13:27
  They're always come in and we have a bit of a laugh, but, um, it's those
• 13:30
  clients you do, they're literally, I think they open their van doors.
• 13:33
  Scrape all the receipts into a bin bag and hand them to me
• 13:36
  once a year and that's fine.
• 13:38
  Um, I think that you are always gonna pay an accountant a lot more money for that
• 13:42
  type of service because, I have to spend a day on the floor dusting concrete off
• 13:47
  the seats and getting them in an order before I can even start doing my job.
• 13:51
  But I think if you are a business owner yourself, if you are, if you're
• 13:54
  keeping records in that way, you get to the end of the year and you will
• 13:57
  genuinely have no idea whether or not your business has been successful.
• 14:00
  You'll genuinely not know have I made a profit of a loss or, you know, So I.
• 14:05
  I do worry about businesses that sort of keep their records like that.
• 14:08
  It always just feels a bit that they're running those businesses on instinct.
• 14:11
  Um, rather those businesses that use software or um, you know, a
• 14:15
  spreadsheet tend to have a lot better track of kind of where they are with
• 14:19
  their business throughout the year.
• 14:21
  Perfect.
• 14:22
  Becca: Um, just to let everyone know, I can see you've got
• 14:23
  some questions coming in.
• 14:24
  I'm gonna come back to them at the end, so we're gonna keep going and
• 14:27
  I'll come back to your questions.
• 14:28
  So I haven't ignored them, but I will come back to them.
• 14:30
  Okay.
• 14:30
  Here's the golden question, Um, which the answer to this one we
• 14:34
  met last time really scared me.
• 14:36
  So can I just do my tax return myself?
• 14:40
  Emma: Um, you can absolutely, you can.
• 14:42
  Legally, there's absolutely nothing to stop you doing your tax return yourself.
• 14:46
  And lots of people do.
• 14:47
  Um, and lots of people don't, and lots of people do and get it horribly
• 14:50
  wrong and get themselves into trouble.
• 14:51
  It really comes down to your own personal capabilities.
• 14:56
  So I think you have to ask yourself the really honest question.
• 14:59
  do I have the competency to do this?
• 15:02
  Do I really understand what's being asked of me?
• 15:05
  Do I really understand HMRCs compliance?
• 15:08
  Um, you know, do I understand the tax rules?
• 15:11
  Do I understand what I can and cannot claim for?
• 15:13
  And if, honestly, honestly, the answer is yes then, then yeah, do it.
• 15:18
  But what I do see quite often, I'm actually working on, on a piece of
• 15:22
  client work at the moment, and he.
• 15:26
  He did his, his own tax return for the last two years, and then his tax bills
• 15:30
  are incredibly high and he's paid them, but he's sort of had this niggling
• 15:33
  feeling that it, it's not right somehow.
• 15:35
  And so he's asked me to go back over the last two years and
• 15:37
  redone it, and I've just saved him about 800 pounds worth of tax.
• 15:41
  Um, You know, so it's, it, it's one of those kind of, it, it's a risk.
• 15:46
  Um, I've also got another client at the moment who did her own tax return,
• 15:50
  um, and has now come to me because she's been compliance checked by HMRC
• 15:54
  and they're trolling back through the last seven years of her records, um,
• 15:58
  which is incredibly stressful for her.
• 16:00
  So the answer is, Yes, you absolutely can do it, but I think, you know,
• 16:04
  with anything in life, only do it if you've got the competency to do it.
• 16:07
  You know, for the same reason why I wouldn't do my own website,
• 16:10
  because I'm just not technically minded enough to be able to do that.
• 16:14
  Um, but there are other things that I do do myself because I, because I can.
• 16:19
  Becca: Yeah, I think that the thing that kind of, I guess, scared me when
• 16:23
  we talked before at the master class was that more the compliance check.
• 16:27
  That's actually, they can come back to you and talk to you about anytime
• 16:30
  in the last seven years, and you have to be able to show a really
• 16:32
  good, um, record of what you've done.
• 16:35
  Emma: Yeah.
• 16:35
  You, you need to have a really good audit trail of that.
• 16:38
  And, um, yeah, it's, It is, it is frightening for, for clients when that
• 16:44
  happens, when we, you know, I mean, there's a couple things to consider.
• 16:47
  The first thing is if, if you are, if you have an accountant and your
• 16:51
  accountant submits your tax return on your behalf, hmrc know that.
• 16:55
  So you are statistically a little bit more likely to be compliance checked
• 16:59
  because HMRC know that if an accountant's done it, it's more likely to be correct.
• 17:03
  So they, they tend to focus a little bit more on people
• 17:05
  that have done it themselves.
• 17:07
  That doesn't.
• 17:08
  If you have an accountant, you definitely won't be compliance checked.
• 17:11
  But it also means, you know, when I'm doing accounts for clients, I'm thinking
• 17:14
  about several things at the same time.
• 17:15
  Firstly, about getting the accounts right, um, and making sure that
• 17:20
  we are compliant with rules.
• 17:21
  Secondly, making sure that I'm minimizing the tax liability for the
• 17:25
  client, because at the end of the day that that's the name of the game.
• 17:29
  But, but doing that legally and doing that, using the provision
• 17:32
  that we have available to us.
• 17:33
  And thirdly I've always got in the back of my.
• 17:36
  If a hm, r c inspector was here looking at this right now,
• 17:40
  do we have that audit trail?
• 17:41
  You know, can we prove, are we demonstrating that
• 17:44
  these are accurate accounts?
• 17:46
  Um, and I think it's really important that all those sort
• 17:48
  of boxes are ticked as your, as you're going through your year end.
• 17:51
  Perfect.
• 17:52
  Becca: So here's the next question that we are all thinking.
• 17:55
  If we don't have an accountant, is it expensive to have an accountant?
• 17:58
  Like I know when we talked again before, I had absolutely no idea how
• 18:02
  much it costs to have an accountant.
• 18:03
  So is it expensive?
• 18:05
  Emma: It depends how big a business you are.
• 18:07
  I mean, our starting rate for Sole Traders is 150 pounds.
• 18:10
  Um, for the year end accounts, that's the, the accounts, the tax return,
• 18:15
  tax calculations, all the advice, you know, face to face with me, et cetera.
• 18:18
  And then whatever help you need through the year, obviously that goes up.
• 18:22
  Um, our most, you know, our, I think our biggest client pays something like
• 18:25
  five grand in the year, but they're a big limited company, you know, with
• 18:29
  payroll and all sorts of things, and we've got lots of clients in between.
• 18:32
  You know, for the average small, um, you know, sole trader running
• 18:37
  some sort of business from home, you're going to be typically
• 18:39
  looking between 115 and 300 pounds.
• 18:42
  You know, depending, um, and I think then you've got a way in your mind is, you
• 18:47
  know, what are you getting for that money?
• 18:48
  Um, you know, firstly I think you're certainly getting that piece of
• 18:51
  mind that, you know it's correct.
• 18:52
  But then thinking about that piece of client work, I've been working,
• 18:55
  you know, on the last couple of days while he has had to pay me some money
• 18:59
  to do the work, he's actually saved six, 700 quid in Tax as a result.
• 19:03
  Um, so no, I don't, I don't think an accountant is, is
• 19:06
  particularly, um, expensive.
• 19:09
  I think that there, it depends who you use.
• 19:11
  There are lots of different types of accountants.
• 19:13
  So there are some very large accountancy firms out there who are geared
• 19:17
  for, towards the very large client.
• 19:21
  and their fees will be higher.
• 19:22
  And you do find, as a small sole trader, if you go to the very large practices,
• 19:26
  you end up sort of paying big practice fees, but you are paying for the luxury.
• 19:30
  And they have a receptionist, you know, they have the fancy paper.
• 19:33
  They, you know, they've got their range rovers parked in the, in the,
• 19:35
  in the car park, outside, you know, they've got somebody else from the
• 19:38
  phone and all that sort of thing.
• 19:39
  If you go to a smaller practice, either just a single, um, so trader,
• 19:43
  you know, some, some accountants, but, you know, run their businesses from
• 19:46
  their home, which is how I started, you know, we've got premises now.
• 19:50
  But you know, I answer my own phone.
• 19:52
  I post my own letters, so, you know, we don't have those overheads.
• 19:55
  So, you know, I think sort of it's about finding the accountant that matches you.
• 19:59
  So I think small, small accountants tend to work better for small
• 20:02
  businesses and big accountants tend to work better for, for big businesses.
• 20:06
  Okay.
• 20:07
  And I think
• 20:07
  Becca: it's worth every penny to take away the stress . Okay, Now we're gonna
• 20:12
  talk now about things that we can claim.
• 20:14
  I know this is something that lots of people like and
• 20:16
  have lots of questions about.
• 20:18
  So we'll do some basic rules, um, and then we'll go through some specifics.
• 20:21
  And I've seen a few people asking the comments as well.
• 20:24
  So quick roundup of basic rules, what we can and can't, we claim against.
• 20:29
  Emma: So, so the, the umbrella ruling onto all of this is, is, is the
• 20:33
  expense wholly for the purpose of your.
• 20:37
  So there was lots of things that are really, obviously, again, thinking
• 20:40
  about our chair manufacturer.
• 20:41
  You know, if you make chairs, then your wood and your nails are very
• 20:44
  obviously, um, for your business.
• 20:46
  If you are a wedding dress supplier, then obviously the purchase of wedding
• 20:49
  dresses and, and accessories for resale are very obviously for your business.
• 20:54
  You know, if you are buying, you know, the, the pen and the, and the
• 20:56
  notepad that I've got in front of me at the moment, you know, that's
• 20:59
  a stationary cost for my business.
• 21:00
  That's all pretty obvious stuff.
• 21:04
  There are some things that people tried to claim, which
• 21:06
  are just absolutely outrageous.
• 21:07
  I mean, a couple of couple of years ago, a client who works from home wanted to
• 21:12
  expense all of his new patio furniture.
• 21:14
  The argument was that, Oh, I sometimes sit outside in my garden and do my work.
• 21:19
  You know, the answer to that is really, you know, it.
• 21:22
  Could you have that conversation?
• 21:23
  If Hmrc a tax inspector was sitting in front of you, could you honestly,
• 21:27
  with a straight face argue that, is a genuine business expense
• 21:30
  and the answer is probably not.
• 21:32
  So most of it's pretty obvious.
• 21:34
  Um, you know, have you bought it for your business?
• 21:36
  Yes.
• 21:36
  Then it almost certainly is a business expense where you get some wooly areas
• 21:41
  where people aren't really quite sure.
• 21:42
  It's things like phone and mileage and, you know, sometimes people ask me things
• 21:46
  like, Well, what about my glasses?
• 21:48
  , you know, because I need my glasses to work on the computer.
• 21:51
  So are they a taxable business expense?
• 21:53
  And the answer is no.
• 21:54
  Um, because they're for you personally, for, they're for your eyes.
• 21:57
  You haven't bought them to actually trade in your business.
• 21:59
  Um, And there are areas, of course, like, um, mobile phones.
• 22:03
  So yes, of course you need your mobile phone to run your business.
• 22:06
  Um, if that is your own mobile phone and you use it for business and
• 22:10
  personal, then we'll take a percentage.
• 22:12
  Normally 50% for your business, 50% for personal.
• 22:15
  If you're using your car, um, for your business, then record
• 22:18
  your mileage and we'll do a mileage calculation based on that.
• 22:22
  Um, So, yeah, expenses, really the, the key question is, is it
• 22:28
  exclusively and holy for your
• 22:29
  Becca: business?
• 22:30
  Perfect.
• 22:31
  So I'm working in my garden now,
• 22:34
  I wish I was . Okay, so let's go into some of the specifics
• 22:38
  that people asked about then.
• 22:40
  So I know Rachel asked this earlier.
• 22:42
  So she is a videographer.
• 22:43
  Um, basically she wears all black to do a wedding.
• 22:46
  Lots of photographers do can, She claim back on the clothes that
• 22:49
  she buys for wearing at those
• 22:50
  Emma: events.
• 22:52
  I'm afraid not.
• 22:53
  So there was some things you can, but generally no.
• 22:55
  So if it's a uniform, so if you've got like a polo shirt with your business
• 22:59
  logo across it, then you can do, um, likewise if it's specialist clothing,
• 23:04
  so if you're a chef, then your chef hat and chef jacket would be tax deductible.
• 23:08
  Um, anything specialist or safety.
• 23:11
  So if you had safety goggles or safety gloves, all those sorts of
• 23:13
  things, they are tax deductible.
• 23:15
  If it's just clothes, then no.
• 23:17
  And there was a, there was an interesting case a couple of years ago.
• 23:20
  With HMRC, it was a, it was a lawyer and she wanted to claim her suits
• 23:26
  that she wore for work as a tax deductible expense, and her argument
• 23:29
  was, well, You know, in everyday life I wouldn't wear a black smart suit.
• 23:33
  I'd be in my jeans and t-shirt.
• 23:35
  I only buy and wear black smart suits for work, therefore it's work expense and,
• 23:39
  and they took it to court and HMRC won..
• 23:41
  And what the judge, actually, he used a lovely phrase, which was,
• 23:45
  you have to clothe your naked body.
• 23:47
  And that was the ruling by the judge is that, you know, you'd.
• 23:50
  You have to wear clothes in the course of your day.
• 23:52
  Okay.
• 23:52
  You're choosing a particular style of clothes to, to match your job, but you
• 23:55
  do still actually need to wear clothes.
• 23:57
  Um, so on that basis, no.
• 23:59
  Your black t-shirt trousers, things like that are not tax deductable.
• 24:02
  Not
• 24:02
  Becca: tax deductable.
• 24:03
  Okay.
• 24:04
  Put a logo
• 24:04
  Emma: on it and then it is, and then its okay.
• 24:09
  Becca: Okay.
• 24:10
  We talked about phone.
• 24:11
  Oh, that's giant.
• 24:12
  Um, we can, so we can claim for our phone, but we work out a percentage is.
• 24:17
  Emma: Yeah, so you can do a couple of things.
• 24:19
  Um, if you have, I mean, I have two phones.
• 24:21
  I have my personal phone and I have my business phone.
• 24:24
  And I did that um, a couple of years ago cause I got fed up with people
• 24:27
  phoning me up at 11 o'clock at night wanting to talk about accounts.
• 24:30
  So I have a separate business phone, so my separate business phone is 100%.
• 24:34
  Um, a business cost, a lot of people use their phone, the one phone
• 24:40
  for business and for personal.
• 24:42
  And so on that basis, we work out a percentage.
• 24:44
  So if you were to say to me, Well, I, it's about half and half, then
• 24:47
  that's what we, that's what we do.
• 24:48
  50 50, um, split between business and work and home.
• 24:53
  Becca: Okay.
• 24:54
  Perfect.
• 24:54
  Okay.
• 24:55
  Someone's asked this question, so I'm gonna bring it in.
• 24:57
  Um, if I buy a laptop and use it half for work and half for personal use,
• 25:01
  how does that work as a business?
• 25:03
  Emma: Exactly as that you described.
• 25:04
  So we charge half of it to work and half of it to personal.
• 25:07
  So we just put half of the cost into the business.
• 25:10
  Becca: Okay.
• 25:10
  So if you have a laptop and you use it for anything other than work, then
• 25:13
  you have to split it as a percentage.
• 25:15
  Is that right?
• 25:16
  Emma: You should do.
• 25:17
  Becca: Okay, . Perfect.
• 25:19
  Right, Let's go to the next one.
• 25:20
  Someone else asked about this as well, so I'll put it up.
• 25:23
  So if I'm meeting a potential couple, obviously in the wedding
• 25:26
  industry, we go out and meet people that might end up booking us, show
• 25:29
  them photos, that kind of thing.
• 25:31
  Can we claim the food and drink that we buy for them at that
• 25:33
  Emma: meeting?
• 25:34
  It's not a tax deductible expense, so, um, what we can do is we
• 25:39
  can put it in your accounts.
• 25:40
  So when we produce your accounts, your profit and loss account,
• 25:43
  you've got your sales less, all of your costs down to your profit.
• 25:46
  It can be really useful to put that in.
• 25:48
  It's called, it's classified as client entertaining, and it can be really
• 25:52
  useful to put it in your account so that you can see as a business.
• 25:55
  How much you're spending and what the impact on your profit is as a business.
• 25:59
  That's good to know.
• 26:00
  However, when we come to calculate your tax, that cost cannot be
• 26:04
  included in the tax calculation.
• 26:06
  Um, the client entertaining just isn't the tax deductible expense.
• 26:10
  Becca: Okay?
• 26:10
  So don't wine and dine your clients too expensive cause you can't claim it back.
• 26:14
  Okay.
• 26:15
  Emma: Well some businesses, I met with a client the other day, um,
• 26:18
  who runs a PR business and for her, that's a, that's actually her, her
• 26:23
  client entertaining spend is, is huge.
• 26:25
  Like, she spends a lot of money every year doing it, but she wouldn't
• 26:28
  have a business if she didn't.
• 26:30
  So she has to do it, She has to spend it.
• 26:31
  We record it in the p and l, we track it year to year.
• 26:34
  You know, we have a look at how, what the impact on sales is and things like
• 26:36
  that, but we take it out for tax purposes.
• 26:39
  So, yeah, it, it's not, I think, There's a bit of a myth out
• 26:42
  there that it's tax deductible.
• 26:43
  So people say, Oh, I can spend this cuz it's on the tax line and that isn't true.
• 26:46
  So it's worth kind of thinking about how much you're spending
• 26:48
  and keeping in control on that
• 26:49
  Becca: spend.
• 26:49
  Spend.
• 26:50
  Quick question from me on this subject.
• 26:51
  So I was thinking about this the other day.
• 26:53
  So if we are buying stuff like that, so say I go to Costa for
• 26:56
  meeting and I buy the drinks and I know that's not tax deductible.
• 27:00
  Should I be still keeping the receipt or not worrying?
• 27:03
  Emma: It, it doesn't matter from a tax point of view, it just isn't relevant.
• 27:07
  Um, you as a business owner may want to keep that and put that in
• 27:11
  your, you know, in your QuickBooks and have it in your p and l.
• 27:14
  So you are keeping a track of, you know, how much I'm spending for my business.
• 27:18
  It's less important about keeping the receipt because we're taking
• 27:21
  it out for tax calculationsanyway.
• 27:23
  So hmrcs, and we'ree talking about sole trader.
• 27:26
  It's slightly different if you're a limited company, but I mean from
• 27:28
  your, But if you're gonna keep all your receipts and all your records
• 27:31
  and record all of this anyway.
• 27:33
  I mean, you might as well, but it, it doesn't, you know, HMRC
• 27:36
  not as important, be compliant.
• 27:37
  If you had to be compliance checked, HMC would not want to look at the receipts
• 27:41
  for that because we're not including that in the tax calculation anyway.
• 27:45
  Perfect.
• 27:46
  Becca: Okay.
• 27:46
  Um, okay.
• 27:47
  Lots of us work from home, so can we claim anything from working from
• 27:50
  Emma: home?
• 27:51
  Yes, you can.
• 27:52
  There's two ways of doing it.
• 27:53
  HMRC provides some rates, which is simplified expenses, which are
• 27:57
  according to how many it might be 10 pound a month or 20 pound a month
• 28:00
  according to how many hours you do.
• 28:02
  And that's the simplest way.
• 28:04
  And, and that's quite good for people who just kind of work on
• 28:07
  their kitchen table or whatever.
• 28:09
  Um, if you have a, a dedicated room, So you've converted your
• 28:13
  spare room into an office and you use that dedicated for business.
• 28:17
  The better way to do it would be to actually calculate the cost.
• 28:20
  So we would take, if you are renting your property, the rent, if.
• 28:25
  I, if you own it, then we take the interest element of your mortgage plus
• 28:29
  all the running cost of your house.
• 28:30
  So electric, gas, water, all of those overheads.
• 28:33
  And then we would allocate, so we would work out what percentage that
• 28:36
  room is of your house and we'd, we'd work out a working from home allowance
• 28:40
  and that can actually work out quite beneficial if we end up coming
• 28:43
  up with a cost of say, 700 pound.
• 28:45
  If that 700 pound is tax deductible, that reduces your net profit by 700 pound and
• 28:50
  therefore reduces your tax liability.
• 28:52
  So it's worth doing.
• 28:53
  Yeah, that is worth
• 28:53
  Becca: too.
• 28:54
  And if you, if you, um, if you buy like a, you know, like when you get a
• 28:58
  summer house or a shed for your garden to work from, can you claim anything on
• 29:02
  Emma: that or not?
• 29:03
  I'm afraid you can't.
• 29:04
  No.
• 29:05
  So that, that falls under the category of capital spend.
• 29:08
  So anything that's deemed as an improvement to your house
• 29:11
  and because that's a structure.
• 29:13
  HMRC view that as an improvement.
• 29:15
  No, that's not you.
• 29:16
  You could, but you get into this really sticky sort of capital gains sort of,
• 29:20
  you know, territory when you come to sell the house and stuff, so, you know.
• 29:24
  No, really.
• 29:25
  Okay.
• 29:26
  Becca: All right.
• 29:26
  Next question.
• 29:27
  How should I log and claim my mileage?
• 29:30
  Emma: It depends what system you're using.
• 29:31
  If we are going back to our paper based system where you've got your folder
• 29:34
  and you're doing it all paper, then get yourself a notepad and just write every
• 29:38
  day the date, the purpose of the journey.
• 29:40
  Um, so it might be the name of the client or that you're going to Tescos
• 29:43
  to buy stationary or coming to see your accountant, um, postcodes number of miles,
• 29:48
  and just record that throughout the year.
• 29:51
  If you are using a spreadsheet, then put a tab on your spreadsheet and exactly the
• 29:55
  same date, Purpose of my, a purpose of.
• 29:58
  Um, postcodes and number of miles.
• 30:00
  It's the round trip.
• 30:01
  Um, if you're using software, quite a lot of softwares
• 30:04
  actually provide, um, a method.
• 30:06
  So, um, QuickBooks, certainly the self-employed part, has a, has a
• 30:10
  mileage log in there that you can record, but certainly keep, keep
• 30:14
  records of that mileage because again, it's all, it's all tax deductible.
• 30:17
  Becca: Perfect.
• 30:19
  Okay.
• 30:19
  Right.
• 30:20
  This is the last official question from me, and then I'm gonna take a few of the
• 30:22
  questions that we got from the comments.
• 30:24
  Um, so if we're doing really well, um, with our self assessment and our business
• 30:29
  is booming, at what point do we then consider becoming a limited company?
• 30:34
  Emma: It really depends on your reasons for wanting to become a limited company.
• 30:38
  There are lots, there are financial and non-financial reasons.
• 30:41
  Um, there are some tax benefits to becoming limited, but only
• 30:44
  once you're a certain size.
• 30:46
  Um, And that certain size, it kind of varies from one business to the next, but
• 30:50
  it's roughly, roughly that 30 k profit.
• 30:53
  So not sales, but profit.
• 30:56
  The way you pay yourself, the way you take money out of a limited company
• 30:59
  is very different than how you take your money out of a, of a sole trader.
• 31:02
  And there are some tax benefits.
• 31:03
  You will save tax, you'll pay less tax, but.
• 31:07
  You'll pay your accountant quite a lot more money for doing all of that for you.
• 31:10
  You'll have payroll costs and accountancy fees because there's
• 31:13
  a lot more work involved.
• 31:14
  So you need to find that sweet spot where the tax that you are
• 31:17
  saving outstrips the extra money that you're paying your accountant.
• 31:21
  And usually, typically that's around that 30 K profit.
• 31:24
  Profit.
• 31:25
  But there are lots of other reasons why you become a limited company that's
• 31:28
  got nothing to do with tax and I'd certainly, I'm not really an advocate
• 31:31
  of only making that decision based for just to save tax and for no other reason.
• 31:36
  And you need to think about what's right for your business.
• 31:39
  So, um, for some, for certain industries, being a limited
• 31:42
  company, um, it's good for image.
• 31:44
  So some of your clients might prefer to work for you if you're work with you,
• 31:48
  if you're a limited company, because it, it makes them feel a little bit more
• 31:51
  secure that you are a proper business.
• 31:53
  It, it's all about perception.
• 31:54
  It's not a real thing, but you know, for, you know, you certain
• 31:57
  industries certainly find that easier.
• 32:00
  Some people feel a little bit more protected working in that
• 32:03
  limited company structure.
• 32:04
  Um, so you do have that limited liability.
• 32:07
  So if you are to take, um, finance or loans out in the name of your
• 32:10
  business, that does protect your personal assets in a way that you
• 32:13
  are not protected so much if you take out business loans in your own name.
• 32:18
  But I think.
• 32:19
  There is a bit of a myth out there of just how much protection that
• 32:22
  you get as a limited company.
• 32:23
  It doesn't protect you from anything and everything, so you
• 32:26
  are still personally liable.
• 32:27
  You know, you'll see on the news every now and again, directors going to prison
• 32:30
  for, um, you know, large companies going to prison for, for negligence.
• 32:33
  You know, you are still responsible for the work that you do, so you can't provide
• 32:38
  company so that there's lots and lots of reasons why you might want to, and I
• 32:42
  think the first step is always to sit and look at the numbers with your accountant
• 32:45
  and talk through all the reasons you know, why you would wanna do that.
• 32:49
  Becca: Perfect.
• 32:50
  Okay.
• 32:50
  Let's take a few questions from people that are coming in.
• 32:52
  If you've got any last questions, pop them up now before we finish.
• 32:56
  So this person says, Am I right in saying you can't climb mileage from
• 32:59
  home to place of work, such as if you have a studio or a lockup to go to?
• 33:04
  Emma: Correct.
• 33:05
  So I'm sitting here in my office that I rent in Wyboston, I cannot
• 33:08
  claim the mileage here because it's my regular place, place of work.
• 33:11
  However, if I now go and see a client, I can claim that mileage.
• 33:15
  Or if I go to the stationary shop to go and stock up on folders,
• 33:19
  I can claim that mileage.
• 33:21
  But if you are somebody that sort of floats around and does you, if you're
• 33:24
  a mobile hairdresser and you're going to lots of different places, then, then
• 33:26
  all of that mileage is, tax deductible.
• 33:29
  Becca: Perfect.
• 33:30
  Okay, next question.
• 33:31
  Can we claim for food we have to buy whilst working away from
• 33:34
  home for an all day wedding?
• 33:36
  Emma: Not all day, but if you're away overnight, then you can
• 33:39
  do, But if it's just, you know, HMRC would, If you think about.
• 33:43
  Going back to my days before I had my business, when I worked in
• 33:45
  London, I would get on the train at seven in the morning, go to London.
• 33:49
  I wouldn't get home till seven o'clock, eight o'clock at night.
• 33:51
  I couldn't, you know, all of that food cost.
• 33:54
  I bought my lunch when I was out in London.
• 33:55
  That was all my own cost.
• 33:57
  So, hm.
• 33:58
  R c argue, that's exactly the same.
• 33:59
  If you are a business owner, if you work away overnight.
• 34:03
  Obviously then that's a, that's for your business.
• 34:05
  So we go back to that wholly and exclusively for your business,
• 34:08
  and then your evening meal and your breakfast becomes tax
• 34:10
  deductible and your overnight stay.
• 34:13
  Yes.
• 34:13
  And your overnight stay.
• 34:14
  Absolutely.
• 34:14
  Your, your hotel costs.
• 34:16
  Cool.
• 34:17
  Okay, next.
• 34:18
  Oh, sorry,
• 34:19
  sorry.
• 34:19
  I was gonna say there isn't a limit on that interestingly.
• 34:21
  So, um, the wording is something like, you know, reasonable.
• 34:24
  Um, and HMRC always makes me a bit nervous when they say things like that
• 34:28
  because this objective, you know, I might feel that reasonable would be, you
• 34:32
  know, a five star hotel and a, you know, a slap up, you know, 150 pound meal.
• 34:37
  Hmrc might look at that and not feel quite the same way.
• 34:40
  So I think it's always been trying to be a little bit sensible about,
• 34:43
  about what you do with that.
• 34:45
  Becca: Okay, next question.
• 34:47
  Does it matter when you submit your tax return?
• 34:50
  Emma: It does.
• 34:51
  Um, so the, the, the year end is the 5th of April, so we've just come
• 34:55
  through our year end now, the 5th of April, which is the year 1819.
• 35:00
  That tax return is due the 31st of January next year if you do it online.
• 35:05
  In theory, you can sit on it and you can submit it on the 31st of
• 35:09
  January if you like to do that.
• 35:11
  Um, and it's legally, there's nothing to stop you doing that.
• 35:15
  That always makes me nervous.
• 35:16
  Um, I, I'm a, I'm a big fan of doing it early.
• 35:19
  I, you know, I think those clients that come in in these
• 35:21
  early months, are usually.
• 35:23
  Less stressed, um, a little bit more organized.
• 35:26
  We can do your tax return now-ish or over the summer.
• 35:29
  I can tell you how much a tax bill is.
• 35:31
  You still don't need to pay it until January, but at least then, you
• 35:34
  know, you can tax plan and you know what, uh, what expense to expect.
• 35:38
  Um, I, you know, seen, had very stressed clients in my office before now who've
• 35:42
  you've chosen to leave it until that December and January been given a tax
• 35:46
  bill that they weren't perhaps expecting.
• 35:49
  And then they've got no time to save for that, and they're in the
• 35:51
  middle of Christmas and all that time when it's really expensive.
• 35:53
  So I personally get it, get it done early, um, but then don't actually pay
• 35:58
  it until the January when it's due.
• 36:00
  Becca: Perfect.
• 36:01
  And I'm a big advocate for getting it done early and last year we ran, um, in
• 36:05
  the Engage Group a tax return challenge to everyone to get their accounts
• 36:09
  up to scratch by the end of June.
• 36:10
  Um, so I, and someone won some Prosecco who took part, so I think we
• 36:14
  might do something again like that.
• 36:15
  Um, so keep your eyes out guys, cause I think that was fun.
• 36:18
  It motivated us all to get our accounts sorted out.
• 36:21
  Emma: I love it.
• 36:22
  I, I think it just, there's such a difference in, you know, those clients
• 36:26
  that pop in there with their accounts, they're relaxed, they're feeling a bit
• 36:29
  small cause they're getting it done early.
• 36:31
  You know, it's a very different feel.
• 36:33
  I hate January cause I'm just surrounded by really stressed out people who, because
• 36:38
  it's been so long since their year end, they've lost half of their receipts.
• 36:41
  Like, you know, they dunno what their tax bill's going to be.
• 36:43
  They're really aware that they're running.
• 36:44
  Time and it just doesn't, it's not very comfortable position.
• 36:47
  So yeah, get it, get it done.
• 36:49
  Get outta the way.
• 36:50
  Everybody else like running around like headless chickens in January.
• 36:53
  You can just sit back and be really smart knowing that you are done.
• 36:58
  Becca: Okay, this is a personal question, so I don't know if you can
• 37:00
  answer it, but I'll ask it and then see what you can or can't answer.
• 37:03
  Okay.
• 37:04
  It says, Can I ask something about tax?
• 37:05
  My hubby is paye, works for a large company, but now tax people have told
• 37:09
  him he needs to do self-assessment too.
• 37:11
  We're a bit confused as he's also been given a tax bill for year 1718.
• 37:17
  Emma: I'd need to look at details of that.
• 37:19
  That's a bit . Um, I mean, just as an overview, there's lots of
• 37:22
  reasons why a pa, somebody on PAYE may need to do a tax return.
• 37:26
  It might be that their salary is over the limit to do it.
• 37:29
  It might be something to do with child benefit.
• 37:31
  It could be, um, if you're over a hundred k salary and you need to do it anyway.
• 37:35
  There's lots of different reasons.
• 37:37
  It might be something to do with P 11 DS not being far properly.
• 37:39
  There's a whole host of reasons, but, um, whoever that is, if you want to give a
• 37:44
  ring, Happy to have a look at it for you.
• 37:46
  Becca: Perfect.
• 37:47
  Okay.
• 37:48
  Is it true that all businesses will have to be doing accounts online
• 37:50
  by some point fairly soon, e.g.
• 37:52
  On Xero or QuickBooks?
• 37:55
  Emma: Yeah.
• 37:55
  I mean, it doesn't have to be Xero or QuickBooks, but what we've got
• 37:58
  coming in now is making tax, tax digital, which is causing a bit of
• 38:01
  a hoo-ha in the world of accounts.
• 38:03
  They're phasing it in.
• 38:04
  So basically what they're trying to get away from people doing is just
• 38:07
  doing everything on paper or just doing everything on spreadsheets.
• 38:10
  They want everything really digital.
• 38:12
  And so then those digital transfers to be directly out the
• 38:15
  software up into, um, into hmrc.
• 38:18
  So the VAT mtd making tax digital for that has come in now.
• 38:24
  Um, and that's for all businesses that have a turnover of over 85,000 pounds.
• 38:28
  So for, for a lot of people it doesn't really affect them.
• 38:31
  For my clients who do have businesses that.
• 38:34
  The changes that I've got, I'm thinking of one client, particularly, they keep
• 38:38
  all their records on a spreadsheet.
• 38:40
  Um, and that causes, poses a problem in terms of how making touch digital works.
• 38:46
  Um, in that, really what they need to be doing is putting the information
• 38:49
  directly into a software, and I'm uploading it directly, um, into hmrc.
• 38:55
  There are some solutions like bridging software and things like that, which
• 38:58
  I don't think today's really the time to look at that, but it's, um,
• 39:00
  you know, it, it, it is changing the way that people are working.
• 39:04
  For a lot of people, it doesn't really matter if you're already somebody that
• 39:07
  uses Zero or QuickBooks or any of the other, um, MTD compliance softwares.
• 39:11
  It kind of doesn't really matter.
• 39:12
  It's really more a thing for your accountant will just slightly
• 39:14
  change the way that they do things if you are a business.
• 39:17
  And, and it's, it's surprising they do exist.
• 39:19
  I have a client, a new client who's, um, turnover is over a hundred
• 39:23
  thousand pounds and they're doing everything handwritten on a notepad,
• 39:27
  which to me just blows my mind anyway.
• 39:30
  And, um, That, uh, you know, and they are not making tax digital
• 39:34
  compliant for their VAT purposes.
• 39:35
  So we are having, they're having to go through a massive learning
• 39:38
  curve at the moment where we're moving them onto software.
• 39:41
  They're having to learn how to use it.
• 39:42
  Everything that they're doing is, is different, and
• 39:44
  that's really hard for them.
• 39:46
  Um, so, so it is kind of, it's a bit hard on some people.
• 39:49
  For most people, the transition's been quite easy.
• 39:52
  Making tax.
• 39:53
  Digital is going to be rolled out sort of to everybody, so it
• 39:56
  will impact, um, self-assessment people, soul traders as well.
• 39:59
  I think what hm, r c are doing is bringing it for the over 85 K.
• 40:04
  Um, V a t clients at the moment, bringing that in, ironing out any problems.
• 40:10
  You know, those are the clients that are more likely to be on
• 40:12
  software at this point anyway.
• 40:14
  Um, and then they'll roll it out to, to you guys, I guess.
• 40:18
  Um, and they're looking at around 2020.
• 40:21
  But I don't know, you know, within the accountancy community there's a lot
• 40:24
  of talk of whether or not that will be delayed and how that's gonna work.
• 40:27
  And I think a lot of it's kind of up in the air.
• 40:29
  The key thing, I think, really, is that your accountant should be working with
• 40:33
  you as you get closer to that, you know, and informing you and letting you know
• 40:36
  if you, if you need to make any changes.
• 40:38
  Becca: Perfect.
• 40:39
  Couple more quick questions.
• 40:41
  If you have a van for business use only, do you need to record
• 40:44
  mileage or just keep fuel receipts?
• 40:46
  Emma: Fuel receipts.
• 40:48
  Okay, So you don't need to record the mileage.
• 40:50
  100% percent for business.
• 40:51
  You don't use it for anything else.
• 40:52
  Every single thing that you, So you need the purchase of the van, your fuel
• 40:56
  receipts, your m OT bill, your repairs bill, you know, new tires, all of that.
• 41:00
  Just keep all of the receipts for all of those costs relating to that.
• 41:05
  Becca: And is credit card evidence acceptable as sometimes
• 41:08
  I don't get receipt for fuel?
• 41:10
  Emma: Um, it, it is, it's not ideal and certainly if you get into a V
• 41:15
  A T position, so if, if you are, if you become VAT registered, um, you
• 41:19
  need to have the VAT receipt that actually details the VAT on there.
• 41:23
  Um, as a sole trader, it, it's, I don't like it, but if you, if that's the
• 41:27
  only, you know, if you don't have a receipt, then you don't have a receipt.
• 41:31
  Having said that, you know, get I don't know of any garages that don't give a
• 41:35
  receipt if you don't, if you ask for one.
• 41:37
  So
• 41:38
  Becca: only when the receipt machines broken at the pump, it's go inside.
• 41:41
  Maybe.
• 41:42
  I dunno.
• 41:43
  Emma: It, it's, it's a, Yeah, I mean, you can do, um, HMRC do
• 41:47
  provide for incomplete records.
• 41:49
  So there are occasions where people have lost their receipts or, you know, things
• 41:53
  have gone wrong and your accountant will be able to, should be able to build up
• 41:57
  those accounts for incomplete records.
• 41:59
  Um, if it's the odd receipt that's missing and it's on the bank
• 42:02
  statement, then that's kind of fine.
• 42:04
  But, you know, sometimes we get to clients who literally, they've lost
• 42:07
  all of their receipts or half of their receipts or something, and then it, it,
• 42:10
  it becomes a little bit trickier then, and then we have to declare to HMRC
• 42:14
  that's that some of it's estimated, so as much as you can keep those records.
• 42:18
  But yeah, of course, you know, I've done it.
• 42:20
  I've lost receipts before.
• 42:21
  Now, you know, it happens.
• 42:23
  Um,
• 42:25
  Becca: Okay.
• 42:25
  Can we claim for an overnight stay if we're attending a course directly
• 42:28
  related to improving our business, like a training course or only for a wedding?
• 42:32
  Yep, you can.
• 42:33
  Perfect.
• 42:34
  And final question, cuz I know you've gotta go, How can
• 42:37
  we get in touch with Emma?
• 42:38
  Someone's asked?
• 42:40
  . Emma: Oh, I should have like, um, Well here's my, I dunno if
• 42:43
  you'd be able to see my business
• 42:44
  Becca: card.
• 42:44
  Well, I can post your details in after.
• 42:46
  Yeah, I'll post them.
• 42:47
  Emma: Becca, You've got my details.
• 42:50
  Um, give me a ring.
• 42:51
  We've got a Facebook page, We've got, um, uh, a website, um, or phone.
• 42:56
  And you can speak to me directly.
• 42:58
  Um, you know, just give me a ring or email and we can have a chat.
• 43:01
  What I'd like to do is just have a quick chat on the phone, um, just
• 43:04
  get a bit of an initial idea of.
• 43:07
  Are we what you're looking for?
• 43:08
  You know, can we help you?
• 43:10
  And then I always like to get people in, really come and have a cup of tea and
• 43:13
  sitting out, I've just been decorating our office so you can come and admire
• 43:16
  on your window blinds and, um, you know, just sort of get to know each
• 43:19
  other and work out a quote and work out how that's gonna, you know, what
• 43:22
  service we can provide going forward.
• 43:23
  It's, we try and keep it quite kind of relaxed and easy.
• 43:26
  Perfect.
• 43:27
  Becca: Thank you so much, Emma.
• 43:29
  Thank you.
• 43:30
  Take care.
• 43:32
  I hope you found that episode from back in my Members' Club archives really helpful.
• 43:36
  Remember, if you are a member, you can go back and watch any of the video training
• 43:39
  sessions in the archives whenever you want, and if you're not a member yet and
• 43:43
  you're thinking about it, go and check out all the information in the show notes
• 43:46
  and find that special offer that I have for podcast listeners there as well.
• 43:51
  I'll be back next week.
• 43:52
  In the meantime, go sort out your accounts and I'll see you soon.