Entrepreneur - want to submit accounts by myself

Entrepreneur - want to submit accounts by myself

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As an entrepreneur I run a few small business - a restaurant and a property development company being the bigger ones.  I used to use an accountant but there have been quite a few errors which I had to spot, and he is trying to increase already-inflated fees, and I feel like I shouldn't need one anyway.

I am meticulous about keeping my numbers in order - I have everything I need sitting in a spreadsheet.  I feel understand the essentials of accounting well enough.  I would be very happy to use HMRC's free online software.  But it seems we've disqualified ourselves from using CATO, electronic CT600, or the rest of their free stuff by using a "Share Premium Account" for issuing a few new Ordinary Shares at a premium last year (I thought this was a straightforward thing to do but apparently not).  I see a bunch of expensive software out there that wants to help me run my business in ways I do not need.  

I already have all my numbers; I know what we will owe and when; I just want to get the information submitted to Companies House and HMRC in a format that is acceptable to them.  There must be a cheap/free piece of software?  Or any other way? Any advice please?

Thanks

Replies (24)

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By cheekychappy
07th Feb 2016 20:13

The fact that you think using spreadsheets is an effective way to run the finances of your businesses tell me that you don't keep up to date with changes in the profession. 

Tax rules change frequently and you will probably find that continuing to use a competent professional is to your benefit. 

If you aren't happy with your current accountant, you should consider changing to one that you have more faith in.

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Replying to DaveyJonesLocker:
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By andykent
25th Apr 2016 12:28

 

xx

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By tom123
07th Feb 2016 20:27

HMRC free software only for basic cases.

As a general idea, the HMRC software is only really suitable for the most basic of cases. Share premium, whilst not a complex idea, is probably not relevant to the smallest million or so companies in existence - hence it's apparent exclusion.

You also have to bear in mind that HMRC probably agreed to exclude some of these concepts in order to avoid being accused of unfavourably treading on the toes of the paid software providers.

What type of errors did you find - are you certain they were errors, or was it a case of terminology.

With property, the general transactional values will be quite high - and the scope for costs arising from incorrect treatment of a transaction quite high.

You should hopefully find the assurance of correct treatment, and scope for tax savings, outweighs the fees that are paid.

 

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Out of my mind
By runningmate
07th Feb 2016 20:35

Get advice from a good accountant

A good accountant should be providing you with a valuable service which involves an awful lot more than the mechanical slotting of numbers from your accounting records into annual accounts & tax returns.

RM

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Teignmouth
By Paul Scholes
07th Feb 2016 21:59

It's OK in theory

If your spreadsheets create a P&L and Balance sheet in a format that complies with the disclosures required under accounting standards/company law then, in theory, you could send this to any accountant using 3rd party software and it might take only an hour or two for your numbers to be imported and configured to produce the formal accounts, for you to sign off, as well as the electronic version needed to send to HMRC (with an electronic Corporation Tax return and tax computations) and Companies House.

I suggest using an accountant rather than getting the software yourself because software does tend to be expensive plus, it can be complex, which is fine for an accountant using it every week, but daunting for business, who will only use it once a year.  I speak from experience here where a client's in house accountant bought PTP software himself to do it to cut costs and ended up two years later begging me to take it back.

I do have a number of clients who pretty much do 95% of everything needed, leaving me only 2-3 of hours of work at the year end, but these all use cloud accounting software, which already configures the numbers in a suitable format.

The other aspect here, that many business owners don't appreciate is that just filling in the HMRC screens from a spreadsheet does not comply with Company Law.  You must prepare formal accounts first, then enter those figures and info into HMRC's screens.

Anyway, not impossible, and there are a few cheaper Cloud systems out there that will do the books and prepare the accounts, the one that springs to mind is "Sage One".

Good Luck

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Replying to Barbara G:
paddle steamer
By DJKL
07th Feb 2016 22:46

Other accounts use

Paul Scholes wrote:

 

The other aspect here, that many business owners don't appreciate is that just filling in the HMRC screens from a spreadsheet does not comply with Company Law.  You must prepare formal accounts first, then enter those figures and info into HMRC's screens.

To add a little to the above full accounts do of course need to be prepared ,as mentioned by Paul, in addition the layout of company accounts for periods starting after 1 January 2015 changed with options re using FRS102/FRS105 now needing considered. You may also need to consider, if say the property development company also say holds property investments, how you wish to approach the issue of revaluations, if it is appropriate.

Whilst Companies House/HMRC are two parties for which accounts are needed,landlords, lenders, suppliers etc can be others, I review quite a lot of accounts re our prospective tenants (abbreviated accounts will not do) if they wish to lease one of our properties,whilst the numbers themselves are the most significant element presentation and accountant's name do sometimes add weight to a positive sentiment, especially re the more expensive units or those where we have competing prospective tenants. Having said that I have seen some pretty poor examples over the years which do have the name of an accountant but the poor examples are more prevalent when there is no accountant's name given.

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Adrian Pearson
By Adrian Pearson
08th Feb 2016 08:34

A signpost for the future
Soon bookkeeping software, likely the cloud ones first, will provide a complete "end to end" process which will include filling accounts and tax returns.

If this poster had this facility available now, I think we can deduce from his post that he would be using it.

Of course, the real question here, and the one explored by other respondents, is should he be adding the knowledge and experience of a good accountant into the process too?

For me, that's easy to answer: yes for many reasons, most explained already. However, I do believe that this poster is demonstrating the coming reality for the accounting profession. In future, we need to move from "you can't do this without me" to "you will be a lot better off if you do this with me".

When the profession loses its position as gatekeeper of the path to filling with the authorities it needs to adapt. It needs to provide a slightly different service to clients and explain why they should use that service.

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RLI
By lionofludesch
08th Feb 2016 08:45

Good luck to the OP.

You're running multiple businesses and you want a free bit of software to cut out all those annoying accountancy fees.

Don't forget to keep your knowledge up to date with a few update courses every year.

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RedFive
By RedFive
08th Feb 2016 09:41

red flags
I have a number of red flags that when waived allow me to politely decline their request for services.

1. Describing him/herself as an Entrepreneur

2. Describing the spread sheet they have produced as having ' already done all the hard work, so just need it submitted'

3. Drives a black Range Rover Sport

It's much easier to make my own meals so I think I will stop using restaurants, they just rip you off with over inflated prices on stuff I can buy in Aldi.

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Replying to Justin Bryant:
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By adam.arca
08th Feb 2016 13:47

So true

RedFive wrote:
I have a number of red flags that when waived allow me to politely decline their request for services.

....

3. Drives a black Range Rover Sport

....

 

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By jon_griffey
08th Feb 2016 09:54

Leave it to the experts

My advice to the OP is that there are some things you are best off not doing yourself, no matter how easy they seem 

Conveyancing on your house and will writing are good examples. Limited company accounts and corporation tax compliance is another.

Although you may have a grasp of the 'essentials', unless your affairs are extremely simple - and the fact that you have multiple companies suggests not, then I would leave it to people who do this stuff every day. The accounting and tax rules change every 5 minutes and you will not be able to keep up with them if you only look at it once a year.

If your accounting records are as well presented as you suggest then you should be able to find an accountant who will bash this out for a very reasonable fee. Unfortunately there are very many rubbish accountants out there who will do a worse job than you so identifying a good one with attention to detail may not be easy.

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By Tim Vane
08th Feb 2016 10:11

Come on chaps, there is absolutely no reason why the OP should not be encouraged to file his own accounts and returns. He clearly does not value his own time as highly as that of his accountant.

I pay for somebody to clean the office because I don't think it is a cost effective use of my time to do so. I also pay for somebody to manage my website. Not because I couldn't do it myself (I could) but frankly I value their time less than I value my own.

So if a client says to me that they would rather spend the time to do the work themselves I rarely try to dissuade them. I know it will take them a lot longer than it would take me to get it right. I do this every day, they would do it once a year, so clearly they are not going to be as efficient. In addition, of course, I would usually expect to find some saving for them when doing the work, because I keep up to date with the legislation. There are very likely to be things they would miss.

Ultimately, it will take them a minimum of 3 or 4 times longer to do the work than it would take me, and realistically probably at least 10 times longer. Now, in most cases my clients will want to spend those many hours being productive in their own business.  It is usually only those with poor business sense who think that spending the many extra hours to reduce a cost is preferable to spending those same hours generating revenue. I agree with RedFive that such people are often self-styled "entrepreneurs" and best-avoided as they rarely appreciate that their business is usually better off if their time is spent on it rather than under it.

So I usually send these clients on their way with my blessing. The smart ones will come back when they realise the value of their own time, and therefore the value of mine. The ones who don't come back are usually the ones who don't get it anyway, and will always be struggling because they have a micro-business mentality.

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By justsotax
08th Feb 2016 10:51

Tim covers it all

but I do also see the irony of someone who 'does it all themselves' coming onto an accountants website to ask advice.  

My perception of the 'best' entrepreneurs was that they always seem to know their own limitations and skill sets, and therefore employee others to those whilst they us their skills to better effect.   

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By MissAccounting
08th Feb 2016 12:49

Self-titled...
Entrepreneur? *Sniggers*

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Nichola Ross Martin
By Nichola Ross Martin
08th Feb 2016 13:12

Why not pay a small fee?

If you send me your TB, I will submit the wretched things for you, however I would not take any responsibility for the accuracy of your figures. I can even do you some accounts in iXBRL too.  

I offer two tips: 1) consider delegating, Richard Branson never got to where he is today by doing his own bookkeeping (although if he started as a sole trader in 2018 HMRC would want him to be just that, I am talking about digital reporting for the self employed), plus it sounds like you could do with some professional advice in respect of your shares, especially if you are DIYing your articles and shareholders agreements, Or

2) Drop your day jobs and take out five years to become an accountant. This is three years plus another two to obtain your practicing certificate, assuming that you pass all the exams and find a firm to take you on. I would recommend the ICAEW as that is my institute, you will cover all sorts of useful things like accounting for share premium accounts and company law. Then you will save lots of professional fees. You can run your other businesses at night after you have done your studying - there is a lot of studying involved in becoming a qualified professional. 

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By petersaxton
08th Feb 2016 20:28

Shelves

I got somebody to put up some shelves for me today - but then I'm not an entrepreneur.

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Stepurhan
By stepurhan
08th Feb 2016 22:00

No worries

OP wrote:
(I thought this was a straightforward thing to do but apparently not).
Nope, can't see any problems here. It's not like they haven't already been caught out by something accounts-related they weren't already aware of.
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Me!
By nigelburge
09th Feb 2016 03:58

And he wants to/thinks he can do it himself

But it seems we've disqualified ourselves from using CATO, electronic CT600, or the rest of their free stuff by using a "Share Premium Account" for issuing a few new Ordinary Shares at a premium last year (I thought this was a straightforward thing to do but apparently not).

Sheesh - I wouldn't act for him if he paid me a fortune. I would run away very fast.

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RLI
By lionofludesch
09th Feb 2016 08:37

Help

Hope all this has helped, Andy.

You never know how much you don't know until it's too late.

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By NYB
09th Feb 2016 12:46

Enterpreunerial attitude
Beggars belief that the " entrepreneur" doesn't get on with doing what he is good at and leave the drossy boring stuff to the accountants, who lets face it are usually competent and fair. Surely he can earn more as an entrepreneur in the time it would take him to do his accounts & pay an accountant. I can earn more in a morning working than I can painting my kitchen! And I am in fits of laughter as this mirrors an exact case that has fallen on my desk this morning. GOOD LUCK. Oh. and don't forget that you will need to get everything amended from your accountant to access all your HMRC accounts

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By Gary Stevens
09th Feb 2016 15:40

To the Original Poster, I think you said it all yourself: "I thought this was a straightforward thing to do but apparently not".

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Teignmouth
By Paul Scholes
11th Feb 2016 17:40

It's likely that 30% of small businesses DIY

and so, but for the sake of a share premium account, andy may well have been one of them.

The basics are actually straight forward, the complex bits can be achieved with the help of software and so, perhaps, HMRC will take the opportunity to help out with CATO over the next year or two.

I'd rather have a client like andy who does all the boring stuff himself, paying me to check it before submitting and for more valuable advice.

What's nice to see is how much valuable advice has been given here.  This time last year the standard response would have been "this site's for accountants, go get one"

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By andykent
25th Apr 2016 13:35

Thanks Everyone!

 

What a wonderful set of comments.  So sorry to pick them all up so late.

A number of people picked me up on my remark about the Share Premium Account.  To clarify, I do understand what this simple mechanism is, I was just unaware that it disqualified me from using HMRC's free software.

My businesses' accounts aren't complicated.  There are a bunch of cashflows, all in a bank account.  Every single one of them is either Revenue, Operating Expense, General Expense, Interest, or Capital-related.  (Granted, each of these has a number of sub-categories).  It is not hard to tell which is which.  I have to send it all to my accountant with every cashflow already categorised anyway.  

It is also not hard to do the basic arithmetic with these numbers to fill in the blanks of a standard set of accounts, and figure out my tax liabilities.  Understanding these things is in fact integral with being an Entrepreneur - if you don't know these things well in advance of the actual preparation of accounts, you can't organise businesses sensibly nor relate with partners and investors.

So having got to this point, you must see why I balk at paying 1000-1500 per company (5 companies and growing), to get an accountant to reproduce calculations I have already performed, in a format which is digestible to the government.  Especially when i typically go 2-3 rounds a time picking up his mistakes. For now I have forked out a much lower sum for an unlimited version of the quite splendid TaxCalc software.  Very possible I will come (begging?) back to a professional at some point, but for now through the DIY approach I'm learning a lot, saving a lot, and rather enjoying it. I am very sympathetic with the comment of Paul Scholes - I think I am more likely to need the services of a professional to consult on an ad hoc basis to check I understand the rules properly, tell me any high-value stuff I may have missed, and perhaps occasionally double-check my numbers.   

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