If you need a window fitted in Greater Manchester, Adam S. is your man. A sole trader for several years, Adam is an expert in the glazing arts. He happily earned approximately £50,000 a year installing windows in homes and businesses throughout the county. Life was good for Adam until he got a shocking letter from HMRC. He owed over £30,000 in VAT and penalties: the equivalent of over six months’ earnings.
Why DIY bookkeeping can be dangerous for sole traders
Adam had done his own bookkeeping for as long as he had been in business for himself. Naturally, Adam had heard of the VAT, but he didn’t realize that he was liable for VAT registration based on his turnover for the prior twelve months. Like many non-accountants, Adam thought “12 months” was the same as a year. HMRC begged to differ.
Adam had gone over the VAT threshold for five years, and, to make matters worse, he had also failed to register for the VAT, incurring the wrath of Her Majesty’s tax collectors.
Hiring UK Individual tax services and 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.
“We’ve seen this before: a successful sole trader caught in the VAT trap because they hadn’t kept up with the annual changes in the VAT and reporting requirements. It’s quite easy for small and seasonal businesses to get caught unawares,” says Jeremiah Jordan, co-founder of RHJ Accountants. “We get to know you, and pro-actively put you on the tax scheme that makes the most sense for you, based on your short-and long-term goals. Then, as we process your bookkeeping, we pro-actively monitor your situation and make adjustments.”
Adam S. recommends RHJ Accountants in Sheffield