Her Majesty's Revenue and Customs (HMRC)

HMRC is a non-ministerial department of the British Government primarily responsible for the collection of taxes and the payment of some forms of state support. HMRC was formed by a merger of the Inland Revenue and Her Majesty's Customs and Excise and came into formal existence on 18 April 2005.[1] The department's logo is the St. Edward's Crown enclosed within a circle.

Departmental responsibilities

The department is responsible for the administration and collection of direct taxes including income tax and corporation tax, capital taxes such as capital gains tax and inheritance tax, indirect taxes (including value added tax), excise duties and stamp duty land tax, and environmental taxes such as air passenger duty and the climate change levy. Other aspects of the department's responsibilities include National Insurance contributions, the distribution of child benefit and some other forms of state support including the Child Trust Fund, payments of Tax Credits, enforcement of the national minimum wage[2] and collection and publication of the trade-in-goods statistics[3]. Responsibility for the protection of the UK's borders passed to the UK Border Agency within the Home Office on 1 April 2008.

HMRC is a law enforcement agency which has a strong cadre of Criminal Investigators responsible for investigating Serious Organised Fiscal Crime. This includes all of the previous HMCE criminal work (other than drug trafficking) such as Tobacco Alcohol and Oils smuggling. They have aligned their previous Customs and Excise powers to tackle previous Inland Revenue criminal offences. They are responsible for seizing (or preventing the loss) of billions of stolen pounds of HMG's revenue. Their skills and resources include the full range of intrusive and covert surveillance and they are are a senior partner in the Organised Crime Partnership Board.

HMRC inland detection officers have wide-ranging powers of arrest, entry, search and detention. The main power is to detain anyone who has committed, or who the officer has reasonable grounds to suspect has committed, any offence under the Customs and Excise Acts.

HMRC is also listed under parts of the British Government which contribute to intelligence collection, analysis and assessment. Their prosecution cases may be coordinated with the Police, the Revenue and Customs Prosecution Office or the Crown Prosecution Service.

Bookkeeping

Bookkeeping is the recording of financial transactions. Transactions include sales, purchases, income, and payments by an individual or organization. Bookkeeping is usually performed by a bookkeeper. Bookkeeping should not be confused with accounting. The accounting process is usually performed by an accountant. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper.

There are some common methods of bookkeeping such as the Single-entry bookkeeping system and the Double-entry bookkeeping system. But while these systems may be seen as "real" bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.

A bookkeeper (or book-keeper), also known as an accounting clerk or accounting technician, is a person who records the day-to-day financial transactions of an organization.[1] A bookkeeper is usually responsible for writing the "daybooks." The daybooks consist of purchase, sales, receipts, and payments. The bookkeeper is responsible for ensuring all transactions are recorded in the correct daybook, suppliers ledger, customer ledger, and general ledger. The bookkeeper brings the books to the trial balance stage. An accountant may prepare the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.

VAT Accounting

If you are registered for VAT, you must keep certain business records and VAT records of your sales and purchases. You must also keep a separate summary of your VAT, called a 'VAT account'. There is no set way of keeping these records and accounts. In most cases, they can be easily adapted from your normal business records. The main thing is to ensure that they are complete and up to date and that it is easy for VAT officers to access them when you have a VAT inspection.

Payroll

As an employer you have a legal obligation to operate PAYE on the payments you make to your employees even if you’re the only person working in your business. If you run a one-person limited company, you’ll be both an employer and an employee. You’ll need to calculate both Income Tax and national insurance contributions due to the tax man.

Tax Returns

A tax return is a document that must be filed with the HM Revenue & Customs declaring liability for taxation. Different bodies must file different returns with respect to various forms of taxation

A tax return is a form (paper or online) on which you:

• report details of your taxable income, and any capital gains if appropriate
• claim tax allowances and tax reliefs

HM Revenue and Customs (HMRC) may issue a tax return to you each tax year. The tax year runs from 6 April one year to 5 April the next. If you receive a tax return, the law says you must fill it in. HMRC uses the information on your tax return to work out your tax bill or work out whether you are due a tax refund.

Companies House – Annual Returns & Accounts

Directors are personally responsible for submitting yearly accounts and the company's annual return to the Registrar of Companies.

An annual return is a snapshot of general information about a company's directors and, registered office address, shareholders and share capital.

The company and its director(s) and secretary can be prosecuted if you file the annual return late, or not at all.

Income & Expenses Accounts

Income and expense accounts starting with revenue accounts, with accounts for operating revenue and non-operating revenue; then cost of sales accounts, followed by operating expenses, and finally, non-operating expenses. These are the accounts from which the income statement will be generated, and will be the accounts needed to prepare tax returns.

Control Accounts

Control accounts are a type of nominal account, but whereas nominal accounts are used for business in a given period (e.g. commissions earned in 2003), control accounts are used for the on-going aspects (e.g. amount currently owed to the business). If there is £5,000 in your “Debtors Control” (i.e. the amount currently owed to you) in the last minute of your financial year, then it will still be there in the first minute of the next financial year, and indeed will stay until it has been received. In contrast, if you have entered £5,000 in the “Fees” nominal during the last month of one year there won’t be anything in the first month of the next year until you have done some more work.

Bank Reconciliation

Bank reconciliation is the process of comparing and matching figures from the accounting records against those shown on a bank statement. The result is that any transactions in the accounting records not found on the bank statement are said to be outstanding. Bank reconciliation allows companies or individuals to compare their account records to the bank's records of their account balance in order to uncover any possible discrepancies. Discrepancies could include: cheques recorded as a lesser amount than what was presented to the bank; money received but not lodged; or payments taken from the bank account without the business's knowledge. A bank reconciliation done regularly can reduce the number of errors in an accounts system and make it easier to find missing purchases and sales invoices.

Trial Balances

A trial balance is a list of all the nominal ledger (general ledger) accounts contained in the ledger of a business. This list will contain the name of the nominal ledger account and the value of that nominal ledger account. The value of the nominal ledger will hold either a debit balance value or a credit value balance. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column. The profit and loss statement and balance sheet and other financial reports can then be produced using the ledger accounts listed on the trial balance.

The name comes from the purpose of a trial balance which is to prove that the value of all the debit value balances equal the total of all the credit value balances. Trialing, by listing every nominal ledger balance, ensures accurate reporting of the nominal ledgers for use in financial reporting of a businesses performance. If the total of the debit column does not equal the total value of the credit column then this would show that there is an error in the nominal ledger accounts. This error must be found before a profit and loss statement and balance sheet can be produced.

The trial balance is usually prepared by a bookkeeper who has used daybooks to record financial transactions and then post them to the nominal ledgers and personal ledger accounts. The trial balance is a part of the double-entry bookkeeping system and uses the classic 'T' account format for presenting values.

Management Accounts / Reporting

Management accounts are the primary source of information which businesses and organisations use to run their operations and plan for the future. Although the main aim of management accounts is to provide management with an accurate picture of business and financial performance, some incorporate:

• Actual performance versus budgeted performance.
• Cash projections and key performance indicators.
• Costing information at a product/service, departmental or business-wide level.
• Non-financial information e.g. time to market, sales tracking, production line statistics, turnaround times, employee absence levels.

Sales Ledgers

A sales ledger records:

• he sales your company has made
• The amount of money received for your goods or services
• Money owed at the end of each month

It's a useful business-planning tool, enabling you to monitor and chase slow payers and see which customers are most profitable. It will also help you file your VAT return

Purchase Ledger

A purchase ledger records all purchases made by your business.

It helps you to monitor:

• Your business' outgoings
• How much money you owe at any one time

In addition, it gives you a record of your most regular suppliers and how much you have spent with each.

It will also help you file your VAT return.

Financial Administration

Financial Administration is the unbrella term used to cover aspects of the business finacial management and can include, secretarial services, Invoice Preparation, Credit Control, Accounts payable inquiries, creditor processing, payment control, income processing and control, debt recovery etc....