Frequently Asked Questions? (FAQS)

Welcome to our FAQs page! Here, you’ll find answers to the most commonly asked questions about our services, policies, and procedures. Consequently, this page is designed to help you find the information you need quickly and easily. Moreover, if you don’t find the answer you’re looking for, please feel free to contact us directly. We will be more than happy to assist you further.

Here are answers to our most frequently asked questions. Click the heading to see the answer. If your question isn’t listed, message us. We’ll respond with details.

1. What can you do for me?

If you need assistance with your tax returns, we can handle that for you. Additionally, we will set reminders so that, next year, we can gather the information in a timely manner. Alternatively, if you want to focus more on your company, we can review your accounting processes. Furthermore, we will provide a tailored package of services, including financial planning, advice, auditing, and record keeping.

Additionally, we offer business structure advice, cost and pricing analysis, taxation, cash flow management, payroll, and government compliance.

2. Are there Approved plans I can only use if all employees are awarded shares or options under them?

Yes, you can only use the SAYE option plan and the SIP if all employees receive the shares or options. However, this does not apply to those who have not completed their probation period. Specifically, the probation period is up to 18 months for a SIP and up to 5 years for a SAYE option. Consequently, employees who have not met these requirements cannot participate.

3. I need visibility of all accounting records in one place, what options are available to me?

ABS Accountancy collaborates with various bookkeeping and accounting systems providers. For instance, we work with both hardwired, internally hosted systems and cloud-based solutions that are accessible from anywhere. Furthermore, we offer expert advice and will recommend practical solutions tailored specifically to your organisation. We are committed to supporting their seamless implementation.

Bookkeeping & reporting
Tax & VAT Compliance
Advisory

4. My business is planning to buy a car. Can we recover the VAT?

Normally, VAT-registered businesses cannot reclaim VAT on the purchase, acquisition, or importation of motor cars due to an input tax block. This block not only applies to outright purchases but also extends to acquisitions under hire purchase or similar agreements, where ownership of the car eventually passes, such as in a lease-purchase agreement.
However, VAT may be reclaimable in the following exceptional cases:

car leasing business.
pool cars, subject to stringent conditions.
cars unsuitable for private use, such as marked emergency vehicles.
Stock for resale by motor dealers and manufacturers.
Cars acquired for the purposes of a car-related trade (mini cabs, self-drive hire, driving instruction).
Vehicles not regarded as motor cars.
ambulances, caravans, prison vans, hearses and other vehicles constructed for
a specific purpose which does not include the carriage of people.
those with space only for the driver.
vehicles with capacity for 12 or more passengers.
those weighing at least 3 tonnes when unladen.
vehicles which can carry a payload of at least 1 tonne.

The hirer of a leased car under a lease hire agreement can deduct only 50% of the input tax. Specifically, the vehicle must be used for business purposes to qualify for that 50% recovery. Moreover, if you are considering buying a double cab pick-up, car-derived van, or combination van, it is worth seeking advice. Determining their exclusion from the definition of a car for VAT purposes could provide benefits.

5. How can I improve my management information?

First, identify what you truly need to know, including key drivers and performance indicators. Next, create and set up a system to produce and monitor these metrics regularly.

Furthermore, we can assist you in pinpointing the essential information you need and the most effective methods for reporting on it. Consequently, you will achieve the very best results!

6. I need to dismiss an employee, what process do I need to follow?

Under UK legislation, for a dismissal to be deemed fair, you must have a valid reason for the dismissal and adhere to a fair process throughout. Specifically, the five fair reasons for dismissal are:

Misconduct
Poor performance
Redundancy
Contravention of a statutory duty (e.g. expired visa)
Some other substantial reason (SOSR)

The fair procedure will differ slightly in each of the five scenarios. For instance, in a misconduct case, you would need to thoroughly investigate the allegations before convening a disciplinary hearing. During this hearing, the employee must have the opportunity to bring an accompanying person. Conversely, in a redundancy scenario, you must consult with the employees as soon as possible and, if available, offer suitable alternative employment.
Furthermore, if you are not confident in managing these processes, it is always advisable to seek advice or external support.

Furthermore, if you are not confident in managing these processes, it is always advisable to seek advice or external support.

7. What are the Corporation Tax rates

There are two rates of Corporation Tax, depending on the company or organisation’s taxable profits:

the lower rate – known as the ‘small profits’ rate; and
the upper rate – known as the ‘full’ rate or ‘main’ rate.

There is also a sliding scale between the lower and upper rates known as ‘Marginal Relief’: if the company or organisation’s profits are over the lower rate but less than the main rate, the effective rate of Corporation Tax it pays rises gradually from the lower rate to the higher rate depending on its taxable profit.

To illustrate the effect of Marginal Relief, where a company has taxable profits of £500,000 in the Financial Year 2012 (and no associated companies – see below), its tax liability is calculated as follows

£500,000 @ 25%	£125,000
minus 1/80 of £1,000,000*	(£12,000)
Tax payable	£112,500

* £1,000,000 is the difference between the upper limit and the profit.

However, if a company has associated companies, the limits noted above are reduced by dividing them by the number of companies that are associated. Broadly speaking, a company is an ‘associated company’ of another company if one of the two has control of the other, or both are under the control of the same person or persons.

8. What does the Tax Premium Insurance cover?

The insurance will fully protect subscribing clients. Specifically, the practice will claim up to £100,000 of professional costs under our insurance policy in the following circumstances:

An HMRC enquiry into a personal or business tax return
An HMRC enquiry into any business accounts, including those of sole traders, partnerships and limited companies.
A dispute with HMRC in which they pursue additional VAT
A dispute with HMRC in which they pursue additional PAYE tax or National Insurance Contributions
A dispute with HMRC relating to the tax status of employees or subcontractors.

9. Do your Accountants talk in English or financial/accounting jargon?

All consultations with our accountants are, in fact, ‘jargon-free’. Consequently, they will explain your options in plain language. As a result, this approach ensures that all the benefits and implications are made as clear as possible. Additionally, this straightforward communication helps you understand every detail with ease.

10. Does ABS Accountancy provide any guarantees?

We don’t want our clients to have any concerns about our service, charges, or delivery timescales. Therefore, we work diligently to provide what we hope is a flawless service. In fact, we are so committed to this goal that we offer you the following guarantees:

We agree on a fixed fee in advance.
We agree on a delivery date in advance.
A response to phone calls and emails within one working day.
A named accountant to look after you.
Newsletters, briefings, and advice to keep you ahead of the game.
Assistance is available in our office, your office, or at home.

11. How long has the practice been operating?

ABS Accountancy is a well-established firm of accountants and tax advisors with a history spanning over thirteen years. Given that, like most other business owners, you are pressed for time, please do not hesitate to get in touch with us. Consequently, we will be more than happy to assist you with your needs.

12. Why should I choose ABS Accountancy for my accounting and tax needs?

The answer is simple. All of us here at ABS Accountancy work hard to deliver the best possible service to our clients. We deliver top-quality advisory services and build our client relationships on trust, integrity, and open communication. Moreover, we stay up-to-date on tax laws and associated legislation and ensure you receive all of the tax benefits possible for your circumstances.

You should choose us because we can help you:

select the most appropriate structure for your business (if you are a start-up or a contractor).
identify goals and develop strategies to achieve them.
plan for change and adapt for survival and growth.
maintain an independent view of your business situation.
keep up to date with government legislation.
improve business through optimum financial management.

13. What industries does ABS Accountancy specialise in?

While we serve clients across various industries, ABS Accountancy has particular expertise in sectors such as catering and hairdressers.

14. How much does ABS Accountancy charge?

Our fees vary depending on the complexity of the work and the specific services required. ABS Accountancy provides transparent pricing structures and will discuss fees with you before commencing any work.

15. Do I need an accountant if software can do everything for me?

Accounting software can handle many routine tasks, such as bookkeeping, invoicing, and basic financial reporting. However, an accountant adds significant value through expert advice, strategic financial planning, tax optimisation, and compliance with complex regulations. An accountant offers personalised insights, identifies potential issues, and helps you make informed decisions to grow your business. Therefore, despite having robust accounting software, an accountant’s expertise remains crucial for comprehensive financial management and strategic guidance.

Additionally, as Making Tax Digital (MTD) rolls out, having an accountant helps you stay compliant with evolving regulations.