Running your own business
Whether you want to work as an accountant or book-keeper yourself, or if you’re thinking of starting your own business and need to get more of an idea of what looking after your own finances involves, read on
A career in finance
Accountancy is a career that offers variety, professional qualifications, the opportunity to work internationally and, potentially, a high salary. Many accountants go on to use their qualification to set up their own business or to move into general management. Accountants are more highly qualified than book-keepers (who may also be known as accounts/finance clerks), and will generally manage, interpret and advise on accounts, while book-keepers keep them (as their name suggests!). Accountants may also be licensed to carry out functions like auditing, and may specialise in a particular accounting area.
Book-keepers record financial transactions. In a large organisation book-keepers may work in a finance office with other staff, perhaps supporting senior finance professionals. Their duties are likely to include completing VAT returns, preparing accounts, keeping records of payments, invoices and receipts, checking bank statements, calculating wages and filing paperwork.
Skill up while serving
Each Service has its accountants and book-keepers, and many of them gain relevant professional qualifications while serving. However, many other Service people deal with accounts as part of their duties, too: supervisors of bars and messes, treasurers of sports and adventurous pursuits clubs, managers of non-public facilities and so on may be responsible for assets and cash that add up to a tidy sum. So, while you may not have formal training or letters after you name, you may certainly be involved – and experienced – in the field.
Accounting is a recognised and valued skill that can open the door to a number of second careers, either as a full-time occupation or combined with other responsibilities. If it’s something you are interested in, it can be mastered at a distance while you are working in an unrelated career, although some years of experience are usually required before you can become fully qualified.
Several professional bodies regulate the training and work of accountants in the UK but, as a general rule, qualifying as an accountant will involve three years of study, exams and relevant employment. Training for professional exams is provided by employers. Early responsibility and fast promotion are available if work and exam results are satisfactory. For details of who to contact to find out more, please see ‘Key contacts’.
Employment in accountancy and book-keeping varies enormously, from finance director of a large multinational to part-time book-keeper working from home on the accounts of a few small local businesses. There are opportunities in public service and in private business, in public practice and in-house
WHERE TO FIND JOB VACANCIES
- AccountancyAge Jobs: www.accountancyagejobs.com
- eFinancialCareers: www.efinancialcareers.co.uk
- GAAP Web: www.gaapweb.com
- Institute of Chartered Accountants in England and Wales (ICAEW) - careers: http://careers.icaew.com
- Institute of Chartered Accountants of Scotland (ICAS): www.icas.com
- Chartered Accountants Ireland: www.charteredaccountants.ie
- careers service vacancy lists
Accounting and book-keeping for business start-ups
Whether you’re thinking of embarking on self-employment or starting your own business, you’ll need to provide accurate accounting records to satisfy the tax authorities, says Clive Lewis of the ICAEW. ‘Legally,’ he says, ‘you have to keep accounting records for your business. This is so you can fill in your tax return and show the figures are right. Good records will help you to run your business more efficiently.’
Here we focus on accounting records needed to satisfy the tax authorities.
HMRC checks on tax returns
If HMRC has reason to suspect a self-assessment, Corporation Tax return or VAT return is incorrect, it will carry out a ‘compliance check’. After investigation, it may issue an assessment or amend the relevant return to collect any unpaid tax. You can ask for a review of, or appeal against, most of HMRC’s decisions, or ask for your appeal to be heard by an independent tribunal.
HMRC also carries out checks on how businesses keep their records. Initially, an HMRC representative might telephone you and ask questions to help establish whether you are keeping the business records you need to meet your legal responsibilities. They may arrange a suitable date and time for a visit to your premises. The consequence of a compliance check or ‘a business records check’ may be the business having to pay additional tax as well as facing penalties.
- For more information, see www.hmrc.gov.uk/record-keeping/index.htm
Records for Value Added Tax (VAT)
Every business registered for VAT is required to maintain financial records that comply with the guidelines provided by HMRC.
- For more information, see www.hmrc.gov.uk/vat/index.htm
Records for employers
HMRC requires every business that employs staff to keep proper records for Pay As You Earn (PAYE) and for the calculation of tax liabilities. With the introduction of Real Time Information (RTI), employers must advise HMRC of their payroll at the same time as making payment to employees.
- For more information, see www.hmrc.gov.uk/paye
Limited company accounts
It is a requirement of the Companies Act that every company should keep proper accounting records of money received and paid, of all sales and purchases, and of assets and liabilities.
For more information, see www.gov.uk/running-a-limited-company/company-and-accounting-records
Clive Lewis, in conjunction with X-Forces, contributes a feature to every edition of Quest, highlighting all you’ll need to know about starting and running your own business. You can find the latest instalment in The Hub, click here or search our back issues online at www.questonline.co.uk to find out more.