#Tax

How To Reconcile Your Bank Account In QuickBooks?

Paul Cooper #businesssupport, Quickbooks, Tax Returns , , , , , ,

As a business owner, you need to keep accurate financial accounts and reconciling a bank statement is an important part of ensuring this, so that the monies you record are consistent with the figures that your bank is reporting. Here, at Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex we recommend bank reconciliation should be carried out every month in order to ensure accuracy of your accounting records, which could flag up unusual transactions quickly. Software such as QuickBooks makes this process a lot easier as there is an automatic bank feed, which allows information from your business bank account to be fed into the accounting system. In our latest blog, we look at what bank reconciliation is, how you do it, top tips and why you might see errors in your figures.

What is bank reconciliation?

This is the process of matching the balances in your business accounting records to the corresponding information in your bank statement. Bank reconciliation will establish if there are any differences between the two cash balances and if there are, you will need to check your business accounting records. Regular checks will highlight anything that appears fraudulent and any accounting errors.

How to carry out a bank reconciliation?

  • Compare your 2 statements
  • Add bank-only transactions to your book balance
  • Add book transactions to your bank balance
  • Compare both of the adjusted balances

First of all you will need to see if both cash balances match. You will have to go through the transactions individually and make a note of any discrepancies. This process will ensure all entries have been downloaded and checked for any errors. You could find for example that duplication has resulted if a transaction has been manually added in addition to the bank feed. Any slight cash differences may be caused by payments that haven’t been processed or interest charges. QuickBooks accounting software has a reconciliation module that allows you to enter the ending cash balance of your bank account to aid this process.

Tips from Caroline Streatfield Bookkeeping on bank reconciliation

CSB recommends that it is easier to reconcile the bank on QuickBooks if you have a copy of the paper bank statement in front of you. If you have multiple transactions on a daily basis, it is a good idea to tick them off manually on the paper statement as well as using the reconciliation screen on QuickBooks. Also if the monthly bank statement is long in length with entries, for example 12 pages long, you may find it easier to reconcile to the balance of each page rather then trying to do the whole month in one go.

Reasons for errors in bank reconciliations

  • A transaction hasn’t been recorded
  • An error in the amount registered
  • The cash balance at the beginning was incorrect
  • Mistakes have been made in journal entries

How can Caroline Streatfield Bookkeeping help you with your bank reconciliation?

Caroline Streatfield Bookkeeping is a registered HMRC agent and can help you with any questions you have regarding bank reconciliation with QuickBooks. Caroline and her team are fully qualified and undertake regular training to keep up to date with HMRC changes. CSB can help you with all your bookkeeping requirements, Self Assessment Tax Returns and payroll services with accounting software training also offered on QuickBooks. For more information, call Caroline on 07982 682746 or 01323 885205 or email info@bookkeepereastbourne.co.uk

Changes To Off-Payroll Working (IR35) Rules – Effective 6th April 2020

Paul Cooper IR35, News, Off-Payroll Working , , , ,

New rules will come into effect from 6th April 2020 for off-payroll working (IR35). The draft legislation was published in the Finance Bill 2019-20, which amongst other tax measures, introduced important changes for workers providing services through an intermediary in the private sector, known as off-payroll working. The Chancellor of the Exchequer will confirm the final contents of the bill in the 11th March budget and the changes will affect any contractors who are working through a Personal Service Company (PSC), recruitment agencies as well as large and medium sized end clients. In the latest blog from Caroline Streatfield Bookkeeping with offices in Eastbourne, we look into off-payroll working in more detail, the main changes and what you will need to prepare.

 What Is Off-Payroll Working?

This is a term used by HM Revenue & Customs (HMRC) to describe the following situation:

It is when an individual provides their own personal services via their own private company, known as their Personal Service Company (PSC) to an end client where the following test is met: if the worker is actually providing those services directly to the end client, the worker would thereby meet the employment status tests to make them an actual employee of the end client.

Main Changes To IR35

  • The end-client is responsible for determining if a contract is inside or outside IR35
  • Small businesses are exempt from the new rules
  • A Status Determination Statement must be provided by the end-client confirming the IR35 status of a contract
  • IR35 status dispute is led by the end-client
  • The 5% administration allowance is to be withdrawn although it will continue for PSCs working with small end clients
  • Employment tax liabilities are transferred to a relevant person who is any party involved in the payment to a PSC

What Constitutes A Small Business?

  • Annual turnover is less than £10.2m
  • Balance sheet total is less than £5.1m
  • Fewer than 50 employees

What You Need To Do As A Client

It will be your responsibility to decide upon the employment status of a worker and it must be done with every contract that you agree with an agency or worker. Once you have decided you will need to:

  • Pass on the reasons for your decision to the worker or the organisation you contract with
  • Keep detailed records of the employment status including reasons and the fees paid
  • Have processes in place that can deal with any disagreements that may arise

Conclusion

Off-payroll (IR35) working is a large topic and it can be problematic determining if the rules apply. However, from April 6th the emphasis will be on you as an employer to determine the contractor status.

What To Do Next

If you are struggling with off-payroll working, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex can help you unravel this complicated status. Call us on 07982 682746 or email us. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Next time, we’ll be talking more about this topic, so be sure to stay tuned to our blog.

Self Assessment – Time Is Running Out – A Guide To Allowable Business Expenses

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Think back to January 2019 – were you rushing around and panicing because you hadn’t filed your Self Assessment form? Here, at Caroline Streatfield Bookkeeping, we are giving you a bit more time. The tax return deadline for filing your online Self Assessment for the tax year ending April 2019 is midnight on 31st January 2020 and your bill has to be paid by then as well. Unfortunately, if you wanted to file a paper return, you’ve missed the deadline of 31st October 2019.

What Are Allowable Expenses?

In the latest blog from Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex, we are able to help you file online and we’re also going to try and explain your general allowable expenses. Some people think that everything you spend is an allowable expense, but it doesn’t quite work like that, although knowing what is allowable is extremely important, as deducting this from your business income will determine how much profit you have made from your business. It’s quite expected that your business will have various running costs but of course allowable expenses do not include monies you take from your business to buy personal items.

What HMRC Says

We’ve gone straight to the HMRC website for the following:

  • The expense must have been for the sole purpose of earning business profits called the ‘wholly and exclusively rule’.
  • Some items bought for your business might also be used for private reasons and here you can only claim the business part of the costs.

Items Used For Business And Privately

In a nutshell, there are 3 items that immediately spring to mind, your mobile phone, your home and your mode of transport. You will have to find a reasonable method of calculating how much of the costs are incurred by your business and by you personally. Other costs which you can claim as allowable expenses are office stationery, which will include postage, printing, ink cartridges, computer software etc. You might also have clothing expenses such as uniforms, staff costs, advertising and marketing fees such as website costs and training courses.

Phones

With reference to your phone, it’s going to quite simple to work out if you have a monthly contract and itemised bill, but if you are on “Pay as you Go”, you will have to make a fair assessment.

Your Home As An Allowable Expense

This will come into play if you have a room which is set aside for business use and here you will be able to claim a proportion of household costs including heating, lighting, insurance, rent or mortgage interest. There are also other considerations including the number of rooms excluding halls, toilets and bathrooms and how many days of the week and hours per day you spend in the dedicated business room.

 

Vehicle And Travel Expenses

 This is a broad field and in relation to your vehicle will include insurance, repairs, servicing, fuel, parking charges, licence fees and breakdown cover. Travel incorporates train, bus, air and taxi fares, hotel rooms and meals on stays while you are away. It’s worth noting that allowable business expenses do not include travel between home and work and any vehicle fines you may incur.

What To Do Next

If you are struggling with filing your online assessment form, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex offers a Self Assessment tax service. Call us on 07982 682746 or email info@bookkeepereastbourne.co.uk to find out how we can help you. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Next time, we’ll be talking about capital allowances, so be sure to stay tuned to our blog.