Accountancy vs Bookkeeping

Accountancy vs Bookkeeping

For somebody who doesn’t work in finance, it can be difficult to distinguish the difference between accounting and bookkeeping, as there are some administrative areas that can overlap depending on the structure of a business and how many employees it has working in its finance department.

However, while bookkeepers and accountants share common goals, they do support your business in different stages of the financial cycle.

Bookkeeping is more administrative, recording financial transactions. Accounting is more subjective, giving you insights into your business’s financial health based on the information provided by bookkeepers.

If you’ve ever wanted a clear definition between accountancy and bookkeeping, keep reading.

What is a Bookkeeper?

Bookkeeping is a legal requirement for all businesses of any size to carry out, and it refers to the recording of the financial transactions of a business, whether a sole trader, a partnership, or a limited company.

A bookkeeper will record all transactions either manually or within an ERP system like XERO and keep copies of all invoices, receipts and evidence of these incomings and outgoings.

The role of a bookkeeper will include:

  • Recording financial transactions
  • Posting debits and credits
  • Producing invoices
  • Preparation of financial statements (balance sheet, cash flow statement, and income statement)
  • Maintaining and balancing subsidiaries, general ledgers, and historical accounts
  • Completing payroll

What is an Accountant?

An accountant has expert knowledge surrounding taxes and accountancy. A business needs to consider more than just the in’s and out’s calculated by a bookkeeper, the right accountant will guide and act as financial business partner, ensuring all allowable expenses are claimed and all decisions are tax efficient to not only the business but the owners, directors, and partners.

The role of an Accountant will include:

  • Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
  • Reviewing company financial statements
  • Analysing costs of operations
  • Completing income tax returns
  • Aiding the business owner in understanding the impact of financial decisions

Designated Accountancy Services

All business owners want to have complete control of their business finances and have an up-to-date view of their financial performance. Our team of Designated accountants are experts who work with you on a flexible basis, whether you need support one day a month, one day each week or more.

Designated is a Xero Bronze Partner and our finance team are Xero certified advisors, trained by Xero to deliver you the best financial support.

Do you wish you had answers to questions like these?

  • How much tax will I need to pay next year?
  • How much profit did we make last month?
  • What do you mean by Tax Digital?
  • Am I managing payroll in the most effective way?

If so, then our Accountancy services may be your solution, please get in touch:

Vicky Garbett, Head Of Accountancy vicky@designatedgroup.com 020 7952 1460 

Top social media trends for your 2022 medical marketing strategy

Top social media trends for your 2022 medical marketing strategy

Top social media trends for your 2022 medical marketing strategy

Your patients are already searching, liking and sharing their favourite products, brands and services on social media—and they’re spending more time on these sites than ever before. But this activity doesn’t stop at consumer products, they are using social media in all aspects of their lives, including their health and wellbeing requirements.

Investing in social media marketing can help you grow your business thanks to its cost-effective advertising, smooth eCommerce capabilities, and ability to give your brand a way to engage with your patients with a more human touch.

If it’s not easy for your private practice patients to find you online, they can easily become frustrated and find another provider that better serves their needs. Particularly with private health, they will actively be looking for patient testimonials and experiences, if they can’t find anything, they are likely to wonder why and gravitate to providers who do publicise testimonials and feedback in an honest and authentic way.

Social media has become an essential part of the marketing mix, with more than three billion people worldwide spending over two hours a day socializing on social networks and messaging apps. Your business can tap into this pool of potential customers to increase user engagement and gain new leads—but you need to build a social media strategy that accurately reflects your business’s goals.

That’s why looking to the experts for their social media top tips and trends can be a great place to start as you begin to build your marketing and social media strategy.

Hubspot recently shared their top to trends to look out for in 2022 and beyond>

  1. TikTok will dominate the social media space.
  2. Reaching new audiences will become the number one social media goal for businesses.
  3. Companies will make more dedicated social media hires.
  4. Augmented Reality will become consumers’ preferred way to try-on products and interact with brands.
  5. Businesses in the B2B space will increase their investments in Instagram and Twitter.
  6. Influencer marketing will mature in 2022.
  7. Social advertising will become more sophisticated.
  8. Businesses will invest in more long-form and short-form content, as well as live audio chat rooms.
  9. Social selling demands will grow.
  10. Consumers will crave snackable content.

There are many social media trends reports circulating but they all seem to share the same ideas, this is interesting when many brands have written off platforms like TikTok, seeing them as a fast-growing pandemic fad or influencer marketing as low return on investment.

As marketers, it is interesting to be part of an industry that is constantly evolving, and with now people more than ever using social media to inform their purchasing decisions, it has never been more important to ensure you’re making the most of the tools and platforms available to you. When social media isn’t prioritized, organizations miss out on the

opportunity to optimize platforms and turn them into revenue generators.

If you’re looking to reach new audiences, trial new platforms, increase your paid social investments or create snackable content to share your story, then our marketing team which includes experts within the social media sphere can help guide you through the process.

Managing small business cash flow and income in 2022

Managing small business cash flow and income in 2022

Content from this article was originally posted by XERO.

While there are many advantages of being your own boss and running your own small business it isn’t always easy and it can come with hurdles you didn’t even know existed. Then throw in 12 months of restrictions, lockdowns and uncertainty. The scale of the impact felt by the self-employed is abundantly clear in research by simply business. They found Covid-19 will cost SMEs an estimated £126.6 billion – double what owners predicted it would cost them. With six million SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – this £126.6 billion hole in the books of small businesses is a huge blow to the economy.

It’s been a lean time for small businesses, and especially the families supporting them.

Xero’s small business trends report shows that 60% of small business owners are worried about their household finances running low. So while 2022 will hopefully be a year of rebounding sales and revenue, owners really need that to carry through to the business’s bottom line.

What the experts say

“Businesses must analyse margins and focus on the products and services that generate actual profits as they try to restore cash to the business,” says Ya Wen How, an accountant at AccountServe, who participated in the report.

While there will be a temptation to withdraw any spare cash from the business as ‘owner’s drawings’, experts say it’s important to be mindful of upcoming and potentially unknown expenses.

“Owners often overlook upcoming business expenses when taking drawings, which creates cash flow issues later,” says David Stephens, an accountant at Stephens Financial Services. These cash flow issues create further disruption to the household budget because money has to be put back into the business.

“Rather than clearing out the business bank account, owners are better off paying themselves a modest amount at regular intervals,” Stephens advises.

Takeaways for small businesses

There are a few things small businesses can do to help support their recovery according to Xero’s small business trends report:

  • Analyse your business margins and focus on products that generate the most profit
  • Create a ‘rainy day fund’ within the business so you’re not constantly loaning it money from your personal savings
  • Schedule regular, sustainable drawings to ease home budgeting
  • Keep your regular drawings modest, as you can always give yourself a bonus payment at the end of a good year

Check out other trends for 2022

Read Xero’s small business trends report learning more about how to manage your cash and income to set your business up for success in 2022.

Post-pandemic Accountancy support and HMRC changes for 2022

Post-pandemic Accountancy support and HMRC changes for 2022

Over the past few years, it has been difficult to keep up with the ever-changing landscape that is, business finance. There have been several schemes announced by the UK Government to support both businesses and their employees but staying on top of all the changes and keeping everybody informed hasn’t always been easy. There have been several changes that come into effect this year, from the end of the Coronavirus working from home tax concessions to the commencement of tax digital and an increase in HMRC’s late payments interest rates. Not to mention 2021 IR35 announcements. We have discussed some of these changes before but we thought as we are hitting a busy time of the year for accounting, it might be useful to share information and resources about these upcoming changes.

Coronavirus working from home tax concession to stop in April 2022
If you or your teams have spent some time working from home since the start of the pandemic, you probably already know about the Coronavirus working from home tax concessions. From April 6 2020 employees have been able to claim some tax relief if they have needed to work from home because of the pandemic. The tax relief is worth between £62 and £125 pa. This is based on 20% of £312 pa or 40% of £312, depending on whether the employee was a basic rate or higher rate taxpayer in the tax year. The allowance can be claimed in both tax years 2020-21 and 2021/22 if an employee was required to work from home at some point during each of the two tax years. By concession, whilst the amount is defined as £6 per week, it allows the full £312 pa to be claimed for the full tax even if the employee only spent a single day working from home. If an employee chooses voluntarily to work from home then they are not entitled to the concession allowance.

As the UK government are no longer recommending businesses to ask their staff to work from home, the scheme will be ending on 6 April 2022. After 5 April 2022, if an employee wishes to claim tax relief for employment-related expenses they will need to comply with the well-established strict traditional tax rules, and only if they have to work from home. Furthermore, claims can only be made for the actual time they have to work from home and the concession that even working from home for one day permits a whole year’s claim will stop.

HMRC says that to be able to claim tax relief, if applicable, an employee can only consider costs like gas and electricity, metered water business phone calls, including dial-up internet access etc.
HMRC say that you cannot claim for the whole bill, just the part that relates to your work i.e. the extra costs incurred by working from home and that you’ll need evidence, such as receipts, bills or contracts, to be able to claim tax relief.

Making Tax Digital for VAT affected companies
From 1st April 2022, all VAT-registered businesses will have to submit their financial accounts information via software that is compliant with the UK governments Making Tax Digital scheme. Since 2019 only businesses which exceeded the VAT threshold of £85,000 have needed to submit their tax details in this way. From next year, however, an additional 7,000 registered VAT businesses will be eligible.

To comply with the new HMRC Making Tax Digital rules, these businesses must have a cloud computer software package – one which is compliant with the government’s Application Programming Interface (API) system. It will no longer be possible for VAT-eligible businesses to submit via the HMRC website.

You are probably wondering whether the government is recommending a particular piece of software, they are not. But businesses that don’t have an accountant will be required to find their own third-party provider to provide the appropriate software and meet the new regulations. The majority of current desktop accounting software won’t be compatible with the government’s system and will likely need to be updated. The same applies to older accounting software packages. Cloud-based software packages should automatically update for HMRC’s Making Tax Digital system. At Designated Medical we are already helping our clients transition to Tax Digital. If you would like accountancy and compliance support, please don’t hesitate to get in touch with our friendly team at Designated Medical.

The changes to IR35 and how it could affect you or your employees
Not necessarily a change for 2022, however, it is something we are still being asked about and something people are still getting their heads around. IR35 is tax legislation that ensures that contractors who are knowingly or not working as ‘disguised employees’ pay the correct tax.
You may have applied for contract jobs in the past where the company said they wanted to pay you under an ‘umbrella company,’ i.e., an agency. This is because it is more tax-efficient for them to do so. You become what is termed a ‘disguised employee’, and the company doesn’t have to pay your National Insurance contributions, nor do they have to offer sick pay or holiday leave. That’s because the agency pays it.

Equally, when you’re a contractor working as a limited company, you can pay corporation tax at 20 per cent on your profits, claim business costs against your tax bill and avoid making National Insurance Contributions (NIC) by paying yourself through dividends.

Gordon Brown introduced IR35 back in 2000 when he was Chancellor of the Exchequer. That’s because when working as it should, HMRC IR35 tax can protect both the contractor and company. Crucially for the government, it also means HMRC won’t lose out on tax. This year though, changes to the rule have come into place.

When you are determining whether or not IR35 applies to you, you will either be found to be ‘inside IR35’ or ‘outside IR35’. These phrases are crucial to defining and understanding your status, and considering whether or not the legislation will impact your future contractual work.

At Designated Medical, our objective is to allow you to focus on growing your business whilst we provide the business support services you need. We offer a full range of services including Medical PA, marketing, accountancy HR and Recruitment.

We provide you with the expert financial support you need for your business, flexibly and cost-effectively, so that you can ensure you deliver the greatest client experience. Our team of Designated Medical Accountants are fully qualified and licenced and will take responsibility for the professional management of your finances. They will be supported daily by our team of qualified bookkeepers who will handle the day-to-day transactions.

If you would like to know more about our Accountancy services, please don’t hesitate to reach out to our friendly finance team who will be more than happy to answer any enquiries you may have.

Send us an email at info@designatedmedical.com or call us on +44 (0) 207 952 1008.

 

How to complete a self-assessment tax return. Let’s talk taxes.

How to complete a self-assessment tax return. Let’s talk taxes.

Before we get into the seasonal swing of things, can we talk taxes? Although many of us are about to wind down for Christmas, now is actually a perfect time to get ahead for the new year and start gathering everything we will need to prepare for HMRC’s self-assessment tax return.

If you have been wondering whether you need to complete a tax return, the following guide should give you all of the basic information you need. For further details please head to https://www.gov.uk/check-if-you-need-tax-return.


Do I need to complete a self-assessment tax return?

Most people are taxed at the source and do not need to worry about submitting a self-assessment tax return, “however, if in the last tax year (6 April to 5 April ) you have worked as self-employed or as a partner and/or earned more than £1,000 (before taking off anything you can claim tax relief on)then you must register as self-employed with HMRC.

It’s also worth noting that any directors of limited companies that wish to receive dividends must also be registered as self-employed to ensure they are correctly taxed.”

You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:

  • money from renting out a property
  • tips and commission
  • income from savings, investments and dividends
  • foreign income

HMRC may contact you with a tax return to complete if:

  • You have untaxed income from investment, land or property, or from overseas.
  • You make capital gains above the annual exempt amount (£12,300 for 2020-21 and 2021-22). you were required to fill in a tax return last year.
  • You’re a pensioner who gets a reduced age-related allowance, though you may be sent a special short version that requires fewer details.

It is however your responsibility to make sure that you declare all taxable income, on time. If you receive a tax return, you must return it, regardless of whether you owe tax or not.

How to register and submit a tax return

If you’re looking to submit a tax return for the first time, you’ll need to register for self-assessment first. The steps are below.

Register with HMRC: The process will vary depending on whether you’re self-employed, registering a partnership or not self-employed – you should click on the option that applies to you. You can register online via HMRC.

Get your Unique Taxpayer Reference (UTR) number: HMRC will send this to you in a letter after you register. The letter will give instructions on how to set up your Government Gateway account.

Use your activation code for your Government Gateway account: Once this is done, you’ll be sent another letter in the post containing your activation code. You’ll need this to complete the set-up of your account – you should do this promptly as the code will expire.

Complete your account setup: It’s only once your Government Gateway account is up and running that you’ll be able to log in and submit your tax return.

HMRC warns that the whole process could take up to 20 working days, so make sure you don’t leave it until the last minute.

Find out what you’ll need and how to fill in a self-assessment tax return.

What are the deadlines for completing a tax return

The deadline for completing a self-assessment tax returns are:

5 October 2021: Deadline to register for self-assessment for the first time

31 October 2021: paper tax return deadline 31 January 2022: online tax return deadline (HMRC says you can submit up to 28 February 2021 without getting an instant penalty)

31 January 2022: tax payment deadline for 2020-21 tax owed, plus any outstanding tax from 2019-20 if you took out a payment arrangement with HMRC. If you pay your tax by payments on account you may have already made payments towards this bill.

HMRC has the power to charge increasingly expensive penalties if you miss the tax return deadline, which starts with a £100 fine from the first day your return is late.

If you need help completing your tax return, our experienced and professional Accountancy team can carry out the leg work for you, ensuring a smooth, simple and stress-free process. Contact Vicky by telephone 0207 952 1460 or via email at info@designatedgroup.com

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