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Learn how to add contacts in Xero with Teri Cotta.

At Rosemary Bookkeeping, we work closely with our friends and partners at Xero to help our clients get to grips with their bookkeeping.

And there is still a lot to get to grips with.

That’s why our accounting crackpot, Teri Cotta, has been working hard to bring you the top tips to be a Xero whiz and understand its processes, from the terribly simple to the terrifically complex.

And if you’re a visual learner, don’t worry, a full video showing each of these points step by step can be found on our YouTube channel.

In today’s Teri Tips, you’ll see how to add contacts in Xero.


What are contacts?

Contacts are customers and suppliers that you do business with.

Add your existing contacts during conversion so you spend less time on data entry when you start creating bills and invoices in Xero.

From the dashboard, click contacts and select all contacts.

The list gives you an overview of your contacts and their phone number, email, and account balances.


Adding a contact

Basic information

Start by entering the contact’s name.

This can be a business or an individual.

If you use client codes or any other form to uniquely identify your contacts, click Add Account Number to add them.

Next, add the primary person and their email address.

Xero will automatically select this person whenever you email this contact.

Click the link to add additional people that are associated with this contact, and that you need to interact with.

Enter their name and email address and enable them to receive the same emails as the primary person.

Click the X to remove additional people.

Next, enter phone details and website address, if you have this information on hand.

You can always edit the contact and add this later.


Address

First, enter a postal address and click the link.

If the street address is the same, Xero automatically copies the postal address for you.


Financial details

 If you know in advance what sales or purchase settings will apply to most of the invoices and bills, enter them now.

For example, all the invoices will be tax-inclusive and coded to the main sales account in Xero.


Tax information

Next, add contact-specific tax information and tax settings.

For example, choose the default sales tax.

Enter a business registration number.

If the contact has an official number you want to show on documents, specify ‘Sales discount applies’ and change the currency of the default currency.

Xero does not apply for this contact.

If you use batch payments to bundle multiple bills into one payment transaction, enter their bank details.


Overriding default invoice settings

You can override the default invoice settings for this contact.

For example, choose a different branding theme or change the default due dates.

If this contact also uses Xero, ask for their Xero network key and enter it here.

It allows you to send sales invoices or bills from your Xero organisation directly into theirs.

When you’re done, click Save.


Xero Contact details

Inside, the Contacts page, you’ll need to close the confirmation message to see more details.

In the right panel, Xero displays the contact details and addresses.

It includes useful links to send an email, view their website and look up their location on a map.

Collapse this panel by clicking the ‘^’ to see more.

These are the financial defaults you entered that Xero would apply to the next invoice or bill.


About Contacts

Each contact in Xero can function as a customer, supplier, or both.

Xero automatically classifies them once you’ve entered an invoice or a bill.

If you have many contacts to bring into Xero, you can use the import contacts function to load them in bulk.


Importing contacts in bulk

There are three steps in this process:

  1. Download Xero’s contacts template file

Start by downloading the import template using the hyperlink under this step.

  1. Copy your contacts into the template

Then export your contacts from your current system and copy them into the template.

  1. Import the updated file template into Xero

Moving forward, you can use the ‘+’ icon from anywhere in Xero to add new contacts.


Need help with your bookkeeping?

Teri Cotta is joined worldwide by Rosemary Bookkeeping’s network of Xero-certified bookkeepers.

So, whether you need help choosing the right software for you, using Xero or outsourcing your books, our experts will be able to help.

Take the hassle out of your bookkeeping and get the time back to focus on what matters most by contacting your nearest Rosemary Bookkeeper today.

How to use Xero’s bank rules to save time reconciling bank statements.

Bank rules are an excellent way to save time during the bank reconciliation process.

This is the often-tedious task of categorising the money coming in and going out of your bank account.

They’re perfect for recurring bank transactions, things like taking clients out for coffee, filling up your work vehicle, and regular transfers between bank accounts.

Once set up, you can reconcile these transactions with just one click.

Bank rules help every type of Xero user save time and they reduce the chance of human error.

In this article, Teri Cotta, our resident Xero brainbox walks you through the A-Z of using bank rules in Xero.

And if you’re a visual learner, don’t worry, a full video showing each of these points step by step can be found on our YouTube channel.


How to create a bank rule on Xero

To view bank rules, go to Accounting, then Bank Accounts and click ‘Bank Rules’ to create a new bank rule.

Click ‘Create Rule’.

Here, the rules are divided into five parts…

Part 1- Apply a bank rule

The first part allows you to enter logic, which decides whether Xero picks up a bank transaction with this rule.

You have many options here to create a rule that’s targeted or a little broader.


Part 2 – Set the Contact

The second part allows you to enter what you want Xero to do with the transaction like what contact or account to allocate the money to.

To start, decide whether your rule is for money going in, out or between accounts.

These can be selected from the panel at the top of the page.

Let’s say that this rule is for parking expenses, this is where we enter conditions and how to pick up these parking transactions.

If they usually have the word parking in the description, payee or reference, we can enter this here using any text field.

Use the “contains” condition if parking is usually part of a larger piece of text.

Equals” makes this rule much stricter and only applies the rule if it’s just the word parking in one of the fields with nothing else.

If you want to add more conditions to the rule to ensure you capture the transactions you need, you can add them here.

If you select ‘all’, each of these conditions must be present in a transaction for it to be picked up, which means it’s targeted.

If you have a lot of conditions, we want any parking transaction picked up if any of these conditions are met. So, we’ll select ‘any’.

Choose an existing contact to apply the parking expense to the contact when you reconcile or use the bank payee as the contact.


Part 3 – Allocate Items

Decide what account you’d like the parking transaction to go to.

If you need to spread the total across multiple accounts, you can either do fixed amounts here add 100% to one account or split the total by percentages.


Part 4 – Set the reference

Choose what reference you’d like to set.

Either choose information which comes with the transaction, or you can enter a reference each time.


Part 5 – Add rule details

Finally, decide if you want to include all your bank accounts in Xero or just one, and name the rule and click save.

You can go back and edit anything about the rule at any time.


Creating a rule from a transaction

Next time a transaction comes through the bank account that fits the rules and conditions, you can click ‘okay’, and it’s reconciled in one click.

To create a bank rule even faster, click ‘Create Bank Rule’ right from a transaction when you’re reconciling the bank.

Xero fills in the information it has for that transaction to give you a head start when creating the rule.


Need help with your bookkeeping?

Teri Cotta is joined worldwide by Rosemary Bookkeeping’s network of Xero-certified bookkeepers.

So, whether you need help choosing the right software for you, using Xero or outsourcing your books, our experts can help.

Take the hassle out of your bookkeeping and get the time back to focus on what matters most by contacting your nearest Rosemary Bookkeeper today.

Teri Cotta walks you through the A-X of Xero.

At Rosemary Bookkeeping, we work closely with our friends and partners at Xero to help our clients get to grips with their bookkeeping.

And there is still a lot to get to grips with.

That’s why our accounting crackpot, Teri Cotta, has been working hard to bring you the top tips to be a Xero whiz and understand its processes, from the terribly simple to the terrifically complex.

In today’s Teri Tips, you’ll discover the cloud and explore how cloud accounting software like Xero can help your business.

We’ll look at the main features of Xero and give you some helpful tips to get you started.

And if you’re a visual learner, don’t worry… a full video showing each of these points step by step can be found on our YouTube channel.


What is the cloud?

First things first… what is the cloud?

The cloud lets you store and access your data over the internet through a network of servers.

Instead of a computer drive, you can use software in the cloud from any device with an internet connection.

The cloud is changing how we work, bank communicate, buy and sell.

You might be using the cloud already without knowing it.


What platforms use the cloud?

Let’s look at some common scenarios you might have experienced using the cloud.

Account information only used to be available during bank opening hours, but online banking stores your financial data securely in the cloud to access 24/7.

  • Online communication software (like Skype and Slack): Video chat functions that use the cloud
  • Calls and instant messaging services: These use the cloud so that conversation lines are available whenever you’re online
  • Streaming services (like Netflix and Spotify): Use the cloud to watch films, listen to music and view live events.

Xero is cloud accounting software that lets you access your financial data anytime, anywhere, and on any device with an internet connection.


Cloud-based software – The Pros

Businesses can benefit significantly from using cloud-based software like Xero.

Accessing cloud software through a web browser or mobile app means you can always retrieve your financial information.

  1. Multi-access

Cloud software lets all users work from the same information simultaneously.

  1. Changes are made immediately

There are no discrepancies, and every Xero user has a unique login, so you can easily track who carries out each task.

  1. Cloud software updates are automatic

You’ll never lose time or money to software upgrades.

  1. Automatic version updates

When you log in to Xero, you always use the most up-to-date version.

Data stored locally on a computer risks being corrupted, stolen, or lost.

But cloud software is stored securely and backed up automatically.

If something unexpected happens to your office equipment, you can get a new laptop and be back on the job straight away.

  1. Secure connection

Cloud software connects securely to organisations like banks, bringing the information directly into the software.

Data flow between software applications means reduced processing time and data entry errors.

  1. Automates labour-intensive tasks

Reconciling accounts and chasing overdue invoices are done automatically, freeing up your time to work on your business.

The long and short of it is, that Xero is a complete platform with all the features you need to run every part of your business, depending on your region and subscription.

Xero can even include payroll, expenses or projects.


The main features of Xero

So, let’s do a quick tour of Xero’s main features.

The navigation bar lets you move easily and quickly around Xero.

Create new or find other transactions

Use the ‘Plus Icon’ to create new transactions like invoices or bills directly from the navigation bar.

Search for contacts or transactions like quotes and view notifications to keep up to date with all things Xero.

Custom Dashboard

The custom dashboard shows key business metrics like your cash flow position, outstanding items to reconcile, and upcoming invoices and bills payable.

It also gives you an up-to-date picture of how your business is performing at any time.

Bank Feeds

Bank Feeds’ automatically import transactions from your bank or financial institution directly into your Xero organisation.

Thus, removing the need for a manual import.

It helps keep your account current and gives an accurate view of your business’s performance.

Here, Xero shows bank statement lines on the left with suggested matches on the right.

Suggestions are based on existing transactions like invoices and bills, bank rules or previously reconciled transactions.

Click ‘OK’ to quickly reconcile the transactions and update your cash flow.

Invoices

Another way to keep on top of cash flow is to send online invoices with online payment options.

Create professional-looking quotes and invoices and send them when you’re still with the customer.

If you register for your Xero organisation with the global E-invoicing network, you can also send and receive an invoice.

Add your logo and payment details to promote your business brand.

And send the invoice with just a couple of clicks.

Xero lets you know when online invoices are sent, viewed or paid.

Let Xero do the hard work and get paid faster with automatic reminders to help manage overdue invoices.

Just decide when and how often you want to send them.

The more ways and the easier you make it for the customers to pay, the less time you’ll spend chasing payments.

Xero research shows that invoices are paid 50% faster when the business connects to a payment service.

They let customers make secure payments directly from online invoices in just a few clicks.

Collated client details

Add all your business contacts to Xero and keep your supplier and client details in one place.

Create groups to manage your contacts and use smart lists to target clients.

Go paperless and store important documents and business information online in the Xero files library.

With automatic backups, you don’t need to worry about ever losing financial data.

You can even send documents directly to your Xero file library using a unique email address.

Templates and reporting

Every Xero subscription comes with financial and accounting reports and budget templates.

Customise them to show what matters most to your business.

Set the date range, compare periods, and modify the columns to change the layout of a report and then save it as a custom report to reuse later.

Staying on top of cash flow is essential for a business to survive.

Many business functions rely heavily on cash, like paying staff and buying supplies.

Xero analytics makes it easier to make the right decisions for your business.

It has two easy-to-read dashboards.

Use short-term cash flow to spot opportunities and risks ahead so you can act immediately.

Use the business snapshot to track key performance indicators like income and expenses and see how quickly your customers pay you.


What Xero does for you

You’re probably already using software in the cloud, and now it’s time to get the benefits of cloud software for your small business.

Xero affords you:

  • A full picture of your business’s financial information is accessible anywhere, anytime from any device with an internet connection.
  • All the tools you need to run and grow a successful business.
  • Direct bank saves and daily reconciliations for the most up-to-date financial data.
  • Online invoicing and payment services to help you get paid faster and improve cash flow.
  • Insightful reporting that leads to better business decisions.
  • Collaboration with unlimited users, all with a unique and secure login and access.

Need help with Xero?

Teri Cotta is joined worldwide by Rosemary Bookkeeping’s network of Xero-certified bookkeepers.

So, whether you need help choosing the right software for you, using Xero or outsourcing your books, our experts can help.

Take the hassle out of your bookkeeping by contacting your nearest Rosemary Bookkeeper for expert bookkeeping and software support today.

Teri Cotta walks you through how to reconcile a bank statement on Xero.

At Rosemary Bookkeeping, we work closely with our friends and partners at Xero to help our clients get to grips with their bookkeeping.

Reconciling your bank account regularly using software like Xero means your records are accurate and up to date.

Reconciling your bank accounts means matching your bank statement lines to transactions in Xero, such as invoices, bills, or other payments.

That’s why our accounting crackpot, Teri Cotta, has been working hard to bring you the top tips to be a Xero whiz and understand its processes, from the terribly simple to the terrifically complex.

Specifically, in today’s Teri Tips, we’re walking you through how to reconcile a bank statement on Xero for some common payment types.

And if you’re a visual learner, don’t worry… a full video showing each of these points step by step can be found on our YouTube channel.


How to start reconciling bank statements in Xero

From your ‘Business Bank Account”, click the reconcile button to begin.

Here, Xero suggests matches by comparing information in the statement line, such as the amount and contact name within the Xero transaction.

Suggested matches are highlighted in green.

Click okay to accept a match.

Xero reconciles the statement line and marks the invoice or bill as paid.

When there’s no suggested match, but you know the transaction is in Xero, you can search for it, click find and match and search for transactions by name, reference or amount.


How to reconcile multiple bills at once

You might have paid multiple bills in one go.

When we select these two bills, the total matches our statement line.

So, click reconcile.


How to reconcile incorrect payments

You might have invoiced a customer, but when you search for the transaction, you see the customer has paid the wrong amount.

You can easily account for these situations when you reconcile.

In the example on our YouTube channel, we recorded an overpayment.

In this scenario, click new transaction.

This is a receive money transaction as it’s money coming in.

Select overpayment and click “save transaction”.

The total of these two transactions matches the statement line.

So, click reconcile. Sometimes you might pay for something on the spot like office supplies or parking, so there isn’t a transaction in Xero.

Here, you create a new spend or receive money transaction to reconcile.

Enter the who, what and why and click okay.


Need expert support?

Teri Cotta is joined worldwide by Rosemary Bookkeeping’s network of Xero-certified bookkeepers.

So, whether you need help choosing the right software for you, using Xero or outsourcing your books, our experts can help.

Take the hassle out of your bookkeeping and get the time back to focus on what matters most by contacting your nearest Rosemary Bookkeeper today.

The great value a bookkeeper can bring to an accountant.

While there is overlap in their work, meaning the two often get confused, bookkeepers and accountants have distinct roles and responsibilities.

They often work well together, as the work of a bookkeeper plays a part in supporting the work of an accountant.

At Rosemary Bookkeeping, we are experts in bookkeeping, supporting clients across the UK, from small businesses to accountants with bookkeeping and finances.

But what can a bookkeeper do for an accountant?

How bookkeepers help accountants

Bespoke client support

The work of a bookkeeper is to understand the needs of their clients.

Our work is personal and bespoke as we tailor our services to work around what you need.

The relationships we build with our clients can also help us to be the bridge between the small businesses we serve and accountants.

Support with existing clients and workload

It’s not just new clients that a bookkeeper can support accountants with.

A bookkeeper can also help accountants with their existing clients.

If accountants recommend their ‘troubled’ or tricky customers to a bookkeeper like Rosemary Bookkeeping, we can support them with their accounts.

Furthermore, during busy periods like the new tax year, we can support accountants and help with capacity.

Streamlined and easy processes

Bookkeepers also work to tight deadlines and work with accuracy, minimising the back and forth to get things done correctly ahead of deadlines.

Rosemary bookkeepers can do all the monthly and quarterly chasing to ensure the experience is stress-free and smooth for everyone involved.

All Rosemary reports and documents are uniformly formatted, making life a breeze for accountants.

See how a Rosemary Bookkeeper can help you

These are just some ways a bookkeeper can help an accountant derive a higher value from their time and services.

Whether you’re an accountant or a small business, a bookkeeper can help streamline your financial processes.

By contacting the professionals at Rosemary Bookkeeping, you receive personal and expert support on all aspects of bookkeeping.

Find your nearest Rosemary Bookkeeping business to see how we can support you today.

With just over a month left to pay your self-assessment tax bill, here’s everything you need to know to get it sorted ASAP.

Self-Assessments are used by HM Revenue and Customs (HMRC) to collect Income Tax.

For most, this is deducted automatically from wages, pensions and savings. But people and businesses with other income must report said income in a tax return. This includes COVID-19 grants and support payments.

How do I know if I need to file a tax return?

By now, no matter the size of your business, you should have registered for your tax return self-assessment, if during the last tax year (6th April 2021 to 5th April 2022) you were self-employed as a sole trader that earned more than £1,000 (before subtracting tax-relief deductions) or if you were a partner in a business partnership.

If you’re unsure of whether this applies to you, HMRC provides a self-assessment eligibility calculator, so that you can see if you need to file a tax return for 2021-2022.

Why do I have to pay?

Tax returns are not voluntary, and have to be completed no matter what.

As a new business and did not send an online return last year, allow extra time (up to 20 working days) as you’ll need to register first.

You’ll need to register through the HMRC website, but there are different ways to register if you’re:

Staying ahead

It makes much more sense to stay on top of these things as they go, so even if you don’t need to submit or pay for the last tax year, it makes sense to get registered now so you are prepared for next year.

Furthermore, you should keep records as current as you can. For self-employed business owners especially, if your books are up to date, you will have a better understanding of the financial standing of your business.

This means you will be able to put money away for the self-assessment at the end of the year.

‘Payments on Account’:

There is also usually a following secondary payment on 31st July to make advanced payments. These are known more commonly as ‘Payments on Account’, which are advance payments towards your tax bill that are made twice a year. Usually on 31st January and 31st July.

What are the deadlines I need to know?

The deadline to register for the last tax year passed on 5th October 2022, and paper tax returns should have been submitted by 31st October 2022.

However, if you haven’t done so already, you can still submit your tax return online and pay the tax you owe to HMRC, as the deadline for both of these requirements is midnight on the 31st of January 2023.

Instances in which the deadline is different:
  • HMRC may have written to you to give different deadlines. In this case, your assigned deadline applies.
  • If you are eligible, you may have submitted your return in time for 30th December 2022.

In such cases, HMRC will automatically collect tax from your wages and pension and must receive a paper tax return by 31st January 2023 if you are a trustee of a registered pension scheme or a non-resident company.

Please note that in this case, you cannot send a return online.

  • If your partnership’s accounting date is between 1st February and 5th April and one of your partners is a limited company, the deadline for returns is different.

Online: 12 months from the accounting date.

Paper: 9 months from the accounting date.

Late payment penalties

Perhaps the most obvious reason to stay on top of this process, is that there are fines for lack of payment.

If your tax return is up to three months late, you will have to pay a late filing penalty of £100. If it is later, or you pay your tax bill late, you will have to pay more and will be charged further interest on late payments.

This amount can be estimated on the HMRC website.

You can appeal these penalties if you have a reasonable excuse such as:

  • The death of a partner or close relative – provided this was shortly before the tax return or payment deadline.
  • Fire, flood or theft that prevented you from making the deadline.
  • Serious or life-threatening illness.
  • Postal delays that you could not have predicted.
  • Computer software failure just before the preparation of your online return.

It’s better to make your payments whilst you have time, rather than suddenly come to find you have to shell out even more for overdue tax returns in the new year.

How Rosemary Bookkeeping can help

There’s a lot to account for when figuring out your tax return payments, and not much time left to sort it before the new year. Your friendly, local Rosemary Bookkeeper can help.

Outsourcing your books to Rosemary means:
  • You receive expert help and support properly and promptly pay your tax return for January 2023
  • Your books are done regularly. So, you can see what is going on in your business
  • You don’t have to spend your valuable time doing the books, so you can do things more beneficial to your financial income
  • No additional staff. You only pay for the work done
  • You don’t have to do a job you loath

Want help with your January self-assessment tax return?

Leaving your assessment to Rosemary leaves you with a clear mind and the space to spend your holidays free of worry, and get on with doing the business you love.

If you think it’s time to outsource your bookkeeping, find your nearest Rosemary Bookkeeping business to see how we can help you today.

You can’t leave it all to tech.

Bookkeeping is tricky. Especially for small businesses, when you are juggling a million other things. So, it’s understandable that you want to ease the burden of this task any way you can. Nowadays we can turn to technology to solve most of our problems, and bookkeeping is no exception. You may have even seen adverts praising digital bookkeeping aids. Popular software like Xero and Quickbooks promise to make bookkeeping easy, help you track and manage expenses and stay on top of taxes. But how true is this?

What bookkeeping software does

Quickbooks promises three major things:

  • The ability to stay on top of taxes
  • The ability to track and manage expenses
  • Keeping data that allows for ‘no-nonsense’ payroll

This technology is all designed around one central premise: streamlining your bookkeeping experience. Everything bookkeeping software do is about using technology to save you time.

The bottom line is, using online software depends on you. Your ability to use this software depends on how much you know about bookkeeping and how up to date you are with recent legislative changes etc. For example, Quickbooks and Xero both rely on the use of VAT codes. But they do not provide support on what these are, and how to use them. For all their data and efficiency, they do not help much if you don’t know a lot about bookkeeping. As a result, relying on this software means taking a big risk depending on how much you know. If you are not confident with your books, you would still be better off using a bookkeeper.

What a bookkeeper does better

Having a personal bookkeeper involves all the benefits of bookkeeping software and more. They help you keep on top of your VAT returns, payroll and tax obligations. A bookkeeper also helps you track and manage your expenses, produces debtor and creditor reports to help with your cash flow and daily management of your business. They provide you with industry-specific knowledge and help you make more educated business decisions. This means you receive support all year round with any bookkeeping queries you might have. With a bookkeeper, you are not reliant on technology. QuickBooks and Xero are fantastic tools that can automate a big part of the bookkeeping process, but when it comes to technology, errors made by automated systems cannot be avoided and need somebody with experience and knowledge to check if the entries and codes are correct. Using a bookkeeper allows you not to be reliant on the software and automatic data entry. A bookkeeper also assures that your business is compliant, you meet all the deadlines, and your information is archived properly. Thanks to this you can avoid costly mistakes, save time and money. knowing that your business finances are in good hands.

For a reliable and professional bookkeeping service, contact your nearest Rosemary Bookkeeping business today.

It’s a question often asked. Small businesses the world over find themselves struggling with their books, but don’t want any extra expenses. So; is it really necessary to outsource your bookkeeping?

The simple answer is: there is no simple answer. It really does depend on you, your time, and your business. You have a lot of options, including purchasing accounting software to make it easier for yourself. But even with the help of these tactics, doing your own books can be daunting, tricky and time consuming.

The question you have to ask yourself is whether it is easy for you to do your own bookkeeping.

Naturally, circumstances differ from business to business. In many cases, a sole trader or small business will start off doing their own bookkeeping and manage to keep on top of it. The problem is, when you start to get busier, time is precious, and you need to decide how productive it is to be spending your time sorting out your receipts and invoices rather than concentrating on the activities that drive your business.

Bookkeeping is also one of those tasks people tend to put off. Especially when trying to focus on everything else involved in running a business, it is easy to fall into the trap of putting it in the diary or setting time aside every month, and then having something come along that then takes precedence. It’s about priorities, and bookkeeping – more often than not – falls into that dreaded “to do list”.

This tends to cause small business owners much more stress in the long run. All of a sudden, that small pile of receipts and invoices can develop in to a messy pile of paperwork that will take hours to sort through.

Ultimately, it comes down to a personal decision about productivity. If you spent the time working on your business instead of doing your own books, what would that translate to in monetary terms? If it’s likely to be more than the fee you will pay a Bookkeeper then the answer to your question is yes, you probably do need a Bookkeeper.

At Rosemary Bookkeeping, we aim to take the fear out of your bookkeeping. Outsourcing is a very realistic option for business owners so don’t be scared. If you are unsure, we are more than happy to come and help you find out about making tax digital, or simply conduct a 1-2-1 health check to give you the opportunity to decide for yourself if you think you could benefit. To get in touch with a professional and expert Bookkeeper in your local area with no obligation, contact your local Rosemary Bookkeeper today.

Everything you need to know to get your head around the new off-payroll working legislation ahead of the new financial year.

The Intermediaries Legislation (or IR35) for off-payroll working came into full force in the private sector last year. However, it can be difficult to see the full effects of a new legislation after so little time has passed. So, as we approach a year of IR35 in the private sector, we’ve put together a blog post of everything you need to know about the legislation to get prepared for the new financial year in March.

On April 6th 2022, at the beginning of the 2022/23 financial year, HMRC will be fully integrating IR35 in the UK’s private sector. This date signals the end of a ‘soft-landing’ period that had allowed affected businesses a grace period over the last 12 months in which HMRC did not charge penalties for non-compliance.

What are the new rules?

The new legislation is designed to create a more level playing field by taxing contractors at a similar rate to employment in order to prevent them from working as ‘disguised employees.In the private sector, this means that the onus to determining IR35 status no longer lies with the contractor, and instead with the entity that pays the contractor. Therefore, this is now a tax burden on all client businesses in the private sector that engage contract workers – with the notable exception of small companies.

From April 2021, if a client decides that IR35 does apply, the contractor is taxed as if they were an employee. However, because the contactor’s employment status does not change, they don’t receive the rights and perks of said employment.

Who do they apply to?

According to HMRC, the new off-payroll working rules can apply to workers (also sometimes referred to as a contractor) who provides services through their own limited company – or another type of intermediary – to a client. In these cases, the intermediary is usually the worker’s own personal service company. However, it can also be a partnership or an individual. Essentially, the legislation applies to all contractors that do not meet HMRC’s definition of self-employed.

Therefore, you may be affected if you are:

A worker who provides services through their intermediary
An agency that provides workers’ services through an intermediary
A client who receives services from such workers through their intermediary

To qualify for exemption as a small business under IR35 regulations, a company has to meet the following criteria:

An annual turnover of less than £10.2 million
A balance sheet total of less than £5.1 million
Fewer than 50 employees

In cases where a contractor is working for a smaller business, it remains the contractor’s responsibility to decide their employment status.

You can also use HRMC’s Check Employment Status for Tax (CEST) tool to find out if you or your worker, should be classed as employed or self-employed for tax purposes.  

Get prepared for the new tax year by leaving your books to Rosemary Bookkeeping. Enlisting the help of a bookkeeper means receiving expert support from informed professionals, dispelling any confusion on tricky matters like IR35, and having more time to focus on the things that matter most to you. Click here to find your nearest Rosemary Bookkeeping business, and find more about our services today.

With the New Year upon us, there are many things to consider for small business owners across the UK, including the imminent January Self-Assessment Tax Return. At Rosemary Bookkeeping, we understand that the process of keeping up with your books and finances can be challenging and daunting for many, especially with so many other things to think about and juggle.

So, why not make a new year’s resolution now: Don’t struggle alone, get help from the professionals. Rosemary Bookkeeping provides expert financial and bookkeeping advice and support to businesses of all sizes across the United Kingdom.

How we can help

Put simply, bookkeeping is the day-to-day process of accumulating, categorizing, and recording financial transactions. It is a foundation of your finances, providing vital information for reports, financial statements and tax returns. The main role of bookkeeping is to keep all financial transactions record up to date in a proper and systematic manner. Bookkeepers are responsible for a number of tasks like:

  • Data entry
  • Balancing bank ledgers
  • Preparing bank reconciliations
  • Tracking income and expenses
  • VAT returns
  • Maintaining the general ledger
  • And sometimes completing payroll and also producing monthly Profit & Loss reports.

Couldn’t I just hire an accountant?

If you are struggling to manage your finances, your first thought might be to look into hiring an accountant. Whilst there are some clear similarities between the role of an accountant and a bookkeeper, there are some key distinctions that can make quite the difference.

The role of accounting is more to provide a picture of the actual profitability, trends, cash flow and other key financial indicators. In general, bookkeepers produce the data, and accountants review and interpret reports providing insights into the business although an experienced bookkeeper can assist with this too.

In this instance, bookkeepers like Rosemary are here to provide more practical support in taking care of your books and finances for you. Leaving your books to us means that they are maintained monthly by qualified professionals with expert financial knowledge so that you can focus your attention on more important things like the actual day-to-day running of your business, and maintaining a healthy work-life balance.

Outsourcing your books to Rosemary means:

  • Your books are done regularly – so you can see what is going on in your business
  • You don’t have to spend your valuable time doing the books – so you can do things more beneficial to your financial income
  • Paying less than you would for an accountant
  • You don’t need to hire any additional staff. You only pay for the work done
  • You don’t have to do a job you loath

If you need help with your bookkeeping, you can trust Rosemary Bookkeeping. It’s what we do. To find out more about our services, or to chat with our experts give us a call on 0345 862 0072, or find your nearest Rosemary Bookkeeping business here.

Inflation rates are projected to reach highs of 4% before the end of this year. This could have a big impact if you own and run a small business. Here’s what you need to know:

British inflation has hit decade highs, caused by a combination of factors including COVID-19, Brexit, rising energy and fuel prices, higher costs of raw materials and goods in factories, and higher bills in restaurants and hotels. In October, the UK Office for National Statistics reported that inflation had hit 4.2%, a 1.1% increase from September – a significantly bigger increase than had been predicted by experts.

So what does this mean for small business owners?

Well, this could have a number of knock-on effects that small business owners should be aware of, including:

  • A rising in costs of labour to compensate for increasing inflation
  • Rising costs of products and services
  • Labour shortages and supply chain issues

This will only be exacerbated by The Bank of England’s inconsistency on the topic of interest rate rises. As this is the mechanism used to control inflation, this will make more money more expensive to borrow – which would further reduce demand. This, in tandem with a fixed supply, means that price increases slow down, and businesses are faced with decision of whether or not to lower prices in order to maintain sales, or raise them to maintain profit (and risk losing customers).

So what can you do?

Unfortunately, the current situation leaves businesses with a dilemma and a bit of a no-win scenario. This will only change when either demand reduces or supply chains resume normal service. Meaning that, at present, the solution is in finding a balance between increasing costs and maintaining profits.

If you find the prospect of managing your finances in this difficult time daunting, why not contact Rosemary Bookkeeping? We can take care of your books for you and help you manage your finances. Hiring a professional bookkeeping service like Rosemary can greatly benefit you as we are able to help with tracking the cost and profit in your business.

Outsourcing your books to Rosemary also means:

  • Your books are done regularly – so you can see what is going on in your business
  • You don’t have to spend your valuable time doing the books – so you can do things more beneficial to your financial income
  • Paying less than you would for an accountant
  • You don’t need to hire any additional staff. You only pay for the work done
  • You don’t have to do a job you loath

To outsource your books today, and receive financial advice from our experts, give us a call on 0345 862 0072, or find your nearest Rosemary Bookkeeping business here.

If you own a small business and are approaching the holidays worrying how you’re going to manage your books, why not make these tips part of your New Year’s resolution?

The prospect of maintaining your books can be a daunting one for many small business owners. Juggling a steadily growing pile of receipts and invoices can certainly start to feel like quite the balancing act. But not to worry, we are here to help alleviate any anxiety about managing your books. Simply follow these tips to stay on top of your finances:

  1. Keep personal and business finances separate

Have separate bank accounts when you are running your own business, by separating out the two, you will be able to avoid any messy mix-ups in your finances.

  1. Don’t get rid of receipts and invoices

In a small business, nothing should go to waste. Make sure that you and your staff receipts and/or invoices for any and all expenditure, and attach them to expenses claims. To be safe, keep all records for at least six years.

  1. Maintain filing system

These records should be simple and easily organised. Sales invoices should be raised and filed in order, and purchases should follow a system that is logical to you.

  1. Keep your time similarly organised

Working closely with a plan or schedule can help you to best stay on top of your finances. Allotting diarised time to reconcile your bank accounts or update records will mean that it becomes part of your routine, and this can help it to feel like less of a chore. It also means that it doesn’t become forgotten amongst all of the other things you have to do.

Be sure to raise sales invoices quickly and file your paperwork on time. You may be able to remember what happened last week, but not last month or the month before.

  1. Stay on track of petty cash

In the same vain, you should be keeping receipts for your petty cash, and reconciling amounts regularly.  Keeping a keen eye on your cash will help to reduce the risk of loss or theft.

  1. Bank payments quickly

Once you have these cash or cheque payments it is important to stay on top of them and get them in the bank fast – even if they might feel old school. By doing this, you will reduce the risk of losing them or spending them quickly. Plus, the quicker they are in the bank, the better your cash flow.

  1. Chasing debtors

Slow payers can cause real harm to your business, and damage your cash flow. Set a clear policy for chasing up debtors. You aren’t loaning money, so your clients need to pay.

  1. Plan ahead by putting money aside

Putting money aside, perhaps in another account, will mean there are extra funds available in the event that you need them. There will always be future expenditures, such as VAT, so be sure to be prepared by planning ahead.

  1. Learn the basics

It’s true that you should always have a professional handle your finances for you, but knowing the basics can help you a lot from day to day. If you would like to learn more about finances and bookkeeping, you can find a lot of useful information and tips on our news page – under the bookkeeping tab.

  1. Trust the professionals

The best way to manage your finances is to enlist the help of a professional. Managing your books can be difficult, especially when trying to manage it alongside everything else you need to do as a small business. Outsourcing your bookkeeping to Rosemary means that your books are maintained regularly, but you don’t have to spend your valuable time doing them yourself. You also won’t need to hire any additional staff – you only pay for the work done – and a bookkeeper is cheaper than an accountant!

If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, or find your nearest branch here.

The Holiday season approaches – a very busy time for most businesses. Whilst it may be easy to get carried away with festivities or Christmas rushes, don’t forget that you can carry out your self-assessment months in advance.

By now, whether you are self-employed, a partnership, or neither, you should have registered for your tax return self-assessment. The deadline for the assessment may be the end of January next year, but we are just about to head into a very busy period for most businesses, and that time will be gone in a flash. So, it’s well worth getting a head-start on the process now.

‘But I simply don’t have time!’ you say. This winter period is a busy one for businesses the world over, so the temptation to put off that January tax return is a strong and understandable one. Unfortunately, it is not an option. Tax returns are not voluntary, and have to be completed no matter what. Luckily there is still plenty of time before that rush period really starts, so you still have the option to get it done now, early doors. Plus, it makes much more sense to stay on top of these things as they go, and keep your records as current as you can. For self-employed business owners especially, if your books are up to date, you will have a better understanding of the financial standing of your business. This means you will be able to put money away for the self-assessment at the end of the year.

There are instances in which the deadline is different:

  • If you are eligible, you can submit your online return by 30th December 2021, provided you want HMRC to automatically collect tax from your wages and pension.

In this case, HMRC must receive a paper tax return by 31st January 2022 if you are a trustee of a registered pension scheme or a non-resident company. Please note that in this case, you cannot send a return online.

HMRC may also write or email to give you a different deadline. More details can be found on their website.

  • Partnership returns if you have a company as a partner.

If your partnership’s accounting date is between 1st February and 5th April and one of your partner’s is a limited company, the deadline for returns is different.

Online: 12 months from the accounting date.

Paper: 9 months from the accounting date.

Late payment penalties:

Perhaps the most obvious reason to stay on top of this process, is that there are fines for lack of payment. If your tax return is up to three months late, you will have to pay a late filing penalty of £100. If it is later, or you pay your tax bill late, you will have to pay more and will be charged further interest on late payments. This amount can be estimated on the HMRC website.

You can appeal these penalties if you have a reasonable excuse such as:

  • The death of a partner or close relative – provided this was shortly before the tax return or payment deadline.
  • Fire, flood or theft that has prevented you from making the deadline.
  • Serious or life-threatening illness.
  • Postal delays that you could not have predicted.
  • Computer software failure just before the preparation of your online return.

But for the sake of tardiness, these fines are not worth the risk. It would be better to make sure of your payments whilst you have time, rather than suddenly come to find you have to shell out even more for overdue tax returns in the new year.

And if absolutely none of this has convinced you that it’s best to pay early, and the idea of sorting out your own tax returns this Christmas makes you say ‘Bah Humbug’, then don’t worry. We’ll do it for you!

Outsourcing your books to Rosemary means:

  • Your books are done regularly (so you can see what is going on in your business)
  • You don’t have to spend your valuable time doing the books (so you can do things more beneficial to your financial income)
  • A bookkeeper is cheaper than an accountant (who doesn’t like to be cost-effective?)
  • Outsourcing means no additional staff (you only pay for the work done)
  • You don’t have to do a job you loath

 

Leaving your assessment to Rosemary leaves you with a clear mind and the space to spend your holidays free of worry, and getting on with doing business you love.

If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, it’s what we do best.