Frequently Asked Questions
The Answers You Need
How are our fees generated?
We utilise a revolutionary pricing tool designed especially for accountants, called GoProposal. We have it configured to suit our business and our clients. This tool enables us to price all our clients consistently, ensuring clear and transparent pricing for everyone. You pay only for the services you need, and after we've had an in-depth Discovery Call to establish your goals for your business.
What happens once a client signs up?
When you accept our proposal and have signed your letter of engagement there are two paths depending on whether you had a previous accountant or whether we are your first accountant appointment.
No previous accountant: within 3 days of accepting our proposal and signing your letter of engagement, we will be in touch by email to officially welcome you. This welcome email will request some basic information to get your client account set up with us, some ID requests in order for us to comply with the anti-Money Laundering regulations, and a link to book in for a Kick Off session with one of the team. In addition to this Welcome Email, if applicable you will receive email invitations for software, to transfer your Xero subscription to us, and to join our client portal in Senta. The Kick Off session is a one-hour session carried out either on Zoom (we will send you an invitation) or in our Garden Office in Hampton. We will discuss who does what, and how often, what your goals are for your business in the next 12 months, and answer any questions you may have, or issues that need immediate attention.
Previous Accountant: all of the above will apply, however we will also email your previous accountant to receive clearance to act as your accountant. Whilst this is not a legal requirement, it is a professional courtesy in the accountancy profession, and is also required by our Professional Indemnity insurers, our regulatory body and as a safeguard against Money Laundering. It is a standard request, where, in addition to asking if there are any reasons we should not be working with you, we ask for reference numbers for HMRC, Companies House and any other relevant agencies, previous paperwork and records, and the transfer of software licenses where applicable. We always ensure a professional relationship with previous accountants is maintained because we are often required to get back in touch with them several months after they have been disengaged.
How can you get in contact with us?
If you would like to find out more about how we work, and can help you, the best way to contact us is to book a Discovery Call here. For existing clients, we recommend emailing one of the team, or book in a call via the link in the team member's email signature.
Who will I be dealing with?
We currently have a small team, with each team member responsible for their own roles. Kally is your main port of call for anything tax and accounts-related. Tamsyn is the go-to for Xero help, forecasting, management accounts, or general queries. Rosie will help update any personal details, get you set up and running with us, and send you helpful reminders! Linda deals with our client bookkeeping, so if you use our bookkeeping service and have any questions about receipts, bank statements, invoicing or VAT and so on, she's your person. Kiran is our in-house payroll guru so any questions you have about payroll and workplace pensions need to go to her. You may from time to time also reach our answering service. They are a lovely bunch, and ensure all messages reach us, with a contact number and a reason for calling - we will get in touch as soon as we can if you get through to them.
Why do you bill monthly?
We believe that monthly billing helps keep our clients' cashflow steady, with no surprise bills at the end of the year. In addition, a monthly fee reflects the ongoing working relationship we strive for with all our clients.
What isn't included in a monthly package?
A monthly package is built to reflect the needs of the individual client - we don't have a 'one size fits all' approach, or have packages that include a load of features that just aren't required. That being said, there are some costs that arise throughout the year which we will bill additionally for, once they have been authorised and approved by you (again - no surprise bills here!) Here are some of the common ones here: mortgage and tenancy references; changes to share allocations/registers; research into a specific subject; bespoke tax planning calculations; VAT registration; PAYE registration.
Will my price change?
Once we have quoted a fee, if nothing changes, you will have that fee guaranteed for 12 months. 3 months before the end of your financial year, we will contact you to book in what we a call a GLOSS review. This is to review your goals for the year ahead, and is also an opportunity for us to check that the services we are providing you with are still relevant to your business. In addition to the annual overall review, bookkeeping services are loosely reviewed every 3 months (if transaction volumes have changed as an average over the previous 3 months, the price will adjust accordingly), and payroll is reviewed every month depending on number of employees.
What is included in a monthly package?
Our monthly package is built with you, and for you. You only have in there what you require. Our most common package for limited companies includes Annual Accounts and Corporation Tax Returns, the filing of the Confirmation Statement, Xero and Receipt Bank subscriptions, director payroll, director tax returns, VAT return preparation and submission. In addition to these services, we include free basic support and advice, access to our quarterly Xero webinars and discounted tickets to our workshops and seminars.
What VAT can be claimed on entertaining, subsistence and general food purchases?
There are complex rules for food expenses, and it is always worth remembering this when you are paying for a meal, or buying food. Not only are the VAT rules relatively complex, the distinction between what is entertainment, (and what is client entertainment and what is staff entertainment) and what is subsistence adds further complexity. As a very basic rule, VAT can be claimed on subsistence purchases for directors and employees. VAT cannot be claimed on client entertainment expenditure (the term 'client' meaning either existing or prospective), VAT can be claimed on staff entertainment (eg the annual Christmas party). Remember that this answer is in relation to VAT, there are separate rules for Corporation Tax - don't assume they are the same. If you have a specific question relating to food expenditure, please do get in touch for us to explain in more detail.
How can I claim mileage?
There are two parts to a mileage claim: calculating the mileage, and claiming it back from the business.
You can claim mileage for any wholly and exclusively business travel in your car (45p per mile), your motorbike (26p per mile) and on your bike (20p per mile). The car rate reduces to 25p per mile for any mileage over 10,000 miles in a tax year. There are a number of apps out there that can automatically calculate your mileage (TripCatcher and MileIQ are two of them, but also several others), but this is one of the few occasions we to like to use a spreadsheet (app fatigue anyone?) We are happy to share this with anyone who needs it. The most important thing for mileage is to ensure you log three things: date, purpose of the journey, and number of miles. Without these three pieces of information, HMRC are likely to reject a claim in the event of an investigation. We recommend building the claim over a month, and then processing it into the accounts on a monthly basis. If you have a lot of mileage, you may wish to do this more regularly.
To actually claim the mileage back, you have a choice: actually withdraw the money from the business bank account each month (or whenever you submit the claim), or leave it until the end of the financial or tax year and adjust your profits accordingly. We usually recommend doing it as part of the process at the end of the year.
What can be claimed for working from home?
There are different rates depending on whether you are a sole trader or a director or employee of a limited company. As a director, running a business from home, it may be more tax-efficient to 'rent' the space to your business. Please book in a call to discuss this with us as it requires a more detailed explanation of how it works, and to discuss the implications.
Sole Trader: Sole traders can claim 'use of home as office' under HMRC's simplified expenses system. This equates to £10 per month for 25-50 hours worked at home per month, £18 for 51-100 hours, and £26 for 101 hours or more. This is usually best for anyone who owns their house with a repayment mortgage. For those with an interest-only mortgage, or who rents, using the calculation method is usually more effective. This would involve collating all your household utilities for the year (gas and electric, water, council tax, rent/mortgage interest) and working out a proportion of your costs depending on the floorspace utilised whilst working from home, and the percentage of time used.
Director or employee: Directors and employees of a business can claim £18 per month for use of home
What is the best way to pay myself as a limited company director?
The most tax efficient way of paying yourself through a profitable limited company is with a salary within the NICs threshold (£8,632 for 19/20 tax year), plus dividends. This ensures maximum money from the business, with the least amount of taxation. This is not always the case, for example when there is negative equity in the business, when the director has other employment or when there is more than one employee. As clients of ours, we will always advise you on the best way to pay yourselves.
How do I record charity donations?
Sole Trader: As a sole trader, you cannot put charitable contributions through the business, although you should log any Gift Aid donations in your self assessment. You may be able to claim tax relief if you are a Higher Rate tax payer.
Limited Company: Limited companies can donate money to charities and claim the corporation tax back on the value of the donation. Sponsorship of a charity or community sports association is different to a donation, but can also be claimed. If you are donating to charity in return for something (eg a raffle, or for tickets to an event), you can only claim a percentage of the donation back (25% of the donation up to £100, £101-£1,000, £25 can be claimed, £1,001 or more, 5% of the donation, up to a maximum of £2,500). Simply spend the money out of your company bank account and ensure the transaction is logged against the relevant category in Xero.
Are we Making Tax Digital (MTD) Ready/Compliant?
As Xero is MTD-compliant, all our clients who need to file VAT returns are set up in the necessary software. There is a process to go through if you were VAT-registered before the mandation date of 1st April 2019, which we can provide you in more detail if you get in touch with us. Any new businesses registering for VAT after 1st April 2019 will automatically be enrolled in the MTD process.
What are the workplace pension contributions at the moment?
For eligible employees, the rates for 2019/2020 tax year are 5% for employees, with the employer paying 3%, giving a total minimum contribution of 8%.
What holiday entitlements are employees entitled to?
Employee holiday entitlement ultimately depends on the contract of employment, but for the majority, a statutory minimum is in place. For most employees working a 5-day week, they are entitled to 28 days' holiday (5.6 weeks) per year. This is inclusive of bank holidays. Part-time workers are entitled to a pro-rated amount. The statutory holiday entitlement is limited to 28 days, so for employees working 6-day weeks, they are still only entitled to 28 days' holiday. We use the government's holiday entitlement calculator to calculate employees' holiday entitlement. This is especially useful when a team member starts partway through the holiday year.
What software do we use at Seed for our clients?
Sole Trader: Most of our sole traders start off on 1tap - helping collate and organise all their business receipts, log their income, and keep an eye on their estimated tax liability. For some of our sole trader clients, they prefer to use our recommended combination of Xero and Receipt Bank (see more below)
Limited Companies/Partnerships/LLPs: All our LLPs and Limited Companies are set up in Xero and Receipt Bank. This process helps with efficiency, reduces workload and increases accuracy. This information enables business owners to keep an eye on their business' performance more effectively, and make data-driven decisions.
In addition to the basic setup mentioned above for all our clients, we also have an array of other software that our clients will have access to. We use Senta as our client portal and CRM system, ensuring safe transfer of sensitive documents, to enable us to obtain digital signatures, and to maintain all our client details effectively. Some of our limited companies also choose to add in management account and forecasting services to their basic package, and for this we use Futrli Advisor, integrating with Xero to provide real time information. We use Calendly to schedule calls with our clients, Zoom for video conferencing and Loom for quick demo videos.