A sole trader and expert window fitter in the Greater Manchester area, Adam is an expert in the glazing arts.
Earning a tidy £50,000 each year installing windows within homes and businesses throughout the county, life was good for Adam. Then he received a shocking letter from HMRC – he owed over £30,000 in VAT and tax penalties; the equivalent of over six months earnings.
DIY bookkeeping can be dangerous for sole traders
Adam had completed his own bookkeeping for as long as he had been running his sole trader business. Naturally, Adam had heard of VAT but didn’t realise he was liable for VAT registration based on his annual turnover for the previous financial year.
Like so many other non-accountants, Adam believed a year was the same as a financial year. HMRC begged to differ.
Adam had gone over the VAT threshold for five consecutive years. To make matters worse, he had also failed to register for VAT; incurring the wrath of Her Majesty’s tax collectors.
Hiring individual accountant services & VAT experts, RHJ Accountants
Panicked, Adam reached out to RHJ Accountants. The firm examined Adam’s DIY bookkeeping, took care of his VAT filings, and negotiated an 83% reduction in his tax and penalties.
The shocking £30,000 burden was reduced to a manageable £5,000. The whole process took RHJ fewer than 60-days.
Founder and director of RHJ Accountants, Jeremiah Jordan, said: “We’ve seen this before; so many times. A successful sole trader is caught in the VAT trap because they hadn’t kept up with the annual changes in VAT and reporting requirements.
“It’s quite easy for small and seasonal businesses to get caught unawares.
“By getting to know you and your business, RHJ Accountants can pro-actively provide individual accountant services and put you on a tax scheme that makes the most sense for you; based on your short-and long-term goals. As we process your bookkeeping, we pro-actively monitor your situation and make adjustments.”