General Accounting Questions

Below, we've answered some of the most common questions we receive about our bookkeeping and payroll services. If you can't find the answer you're looking for,
please don't hesitate to get in touch with our team.

General Accounting & Bookkeeping Questions

• What's the difference between a bookkeeper and an accountant?

  A bookkeeper is responsible for recording and organising your day-to-day financial transactions, including invoices, receipts, bank reconciliations, and maintaining accurate records. They keep your books up to date and provide the foundation for your financial management.

  Bookkeepers are also responsible for management accounts, payroll, CIS, VAT returns and self-assessment.

  An accountant takes the information prepared by the bookkeeper and uses it to provide strategic advice, prepare tax returns, analyse your financial performance, and help with tax planning.

  Many businesses benefit from both services. At White & Co. Accounting, our bookkeeping services provide the accurate records you need, whilst our dedicated support and expertise help you to make informed decisions and stay tax-efficient.

• How much does a bookkeeper cost?

  The cost of bookkeeping services varies depending on the size of your business, the volume of transactions, and the level of service you require. Generally, bookkeeping costs can range from £150 to £500+ per month for small businesses.

  Factors that affect the cost include:

  • Number of transactions per month
  • Complexity of your business structure
  • Whether you need weekly, monthly, or quarterly support
  • Additional services like payroll or VAT returns

• What is Self-Assessment?

  Self-Assessment is HMRC's system for collecting Income Tax from individuals whose income isn't automatically taxed at source through PAYE (Pay As You Earn). If you're self-employed, a sole trader, or have additional income that hasn't been taxed, you'll need to complete a Self-Assessment tax return each year.

  The tax return reports all your income and expenses for the tax year (which runs from 6 April to 5 April the following year). Based on this information, HMRC calculates how much Income Tax and National Insurance you owe.

• Who needs to file a Self-Assessment tax return?

  You need to file a Self-Assessment tax return if you:

  • Are self-employed as a sole trader and earned more than £1,000 (before deducting expenses)
  • Are a partner in a business partnership
  • Receive rental income from property
  • Have income from savings, investments, or dividends above certain thresholds
  • Are a company director (unless all your income is taxed through PAYE)
  • Have income from abroad that needs to be declared
  • Need to pay Capital Gains Tax on the sale of assets

  If you're unsure whether you need to file a Self-Assessment, our team at White & Co. Accounting can help you understand your obligations. We provide expert self-assessment tax return services in Kent, taking the confusion out of the process and making sure you remain compliant with HMRC.

• How do I register for Self-Assessment?

  To register for Self-Assessment, you need to sign up with HMRC online or by post. The deadline for registering is 5 October following the end of the tax year you need to report.

  Here's the process:

  1. Go to the HMRC website and create a Government Gateway account (if you don't already have one)
  2. Complete the online registration form with your personal details
  3. Explain why you need to register (self-employment, partnership, rental income, etc.)
  4. HMRC will send you a Unique Taxpayer Reference (UTR) number by post within 10 working days

  Once registered, you'll be able to complete and submit your tax return online. The deadline for submitting your return is 31 January following the end of the tax year.

  If you find the registration process confusing or simply want expert support, White & Co. Accounting can help. Our self-assessment services in Kent include guiding you through registration and handling your entire tax return from start to finish.

• What is Making Tax Digital (MTD)?

  Making Tax Digital (MTD) is HMRC's initiative to modernise the tax system by requiring businesses and individuals to keep digital records and submit tax returns using compatible software.

  MTD currently applies to:

  • VAT returns: Since April 2022, all VAT-registered businesses must use MTD-compatible software to keep records and submit their VAT returns digitally

  • Income Tax Self-Assessment: From April 2026, self-employed individuals and landlords with annual business or property income above £50,000 will need to follow MTD rules

  Under MTD for Income Tax Self-Assessment, you'll need to:

  1. Keep digital records of your income and expenses
  2. Submit quarterly updates to HMRC throughout the tax year
  3. Make a final declaration after the end of the tax year

  The aim is to reduce errors, make tax administration more efficient, and help you stay on top of your tax obligations in real-time rather than once a year.

  At White & Co. Accounting, we help businesses and sole traders transition to Making Tax Digital smoothly. We use MTD-compatible software and handle all digital submissions on your behalf, ensuring you remain compliant with HMRC's requirements without the hassle.

• What is a VAT return?

  A VAT return is a form that VAT-registered businesses submit to HMRC, usually every quarter, to report the VAT they've charged to customers (output VAT) and the VAT they've paid on business purchases (input VAT).

  The return shows:

  • How much VAT you've collected from sales
  • How much VAT you've paid on business expenses
  • The difference between the two, which determines whether you owe HMRC money or are due a refund

  Most businesses submit VAT returns quarterly using Making Tax Digital (MTD) compatible software. Even if you have no VAT to pay or reclaim for a period, you still need to submit a return.

• When do I need to register for VAT?

  You must register for VAT if your business's taxable turnover exceeds the VAT threshold within any 12-month period. As of 2024/25, the VAT registration threshold is £90,000.

  You need to register if:

  • Your taxable turnover for the past 12 months has exceeded £90,000
  • You expect your turnover to exceed £90,000 in the next 30 days

  You can also register for VAT voluntarily if your turnover is below the threshold. This can be beneficial if you regularly pay VAT on business expenses, as you can reclaim this VAT from HMRC.

• What is the Construction Industry Scheme (CIS)?

  The Construction Industry Scheme (CIS) is a tax deduction scheme that applies to the construction industry. Under CIS, contractors deduct money from subcontractors' payments and pass it to HMRC as advance payment towards the subcontractor's tax and National Insurance.

  CIS applies to most construction work, including:

  • Building, decorating, and refurbishment
  • Installation of systems (heating, plumbing, electrical)
  • Site preparation and demolition
  • Repairs and maintenance

  If you work in construction as either a contractor or subcontractor, understanding and complying with CIS rules is essential to avoid penalties from HMRC.

  White & Co. Accounting provides specialist CIS payroll services in Kent, making sure contractors and subcontractors meet their obligations and handle all CIS deductions correctly.

• Who needs to register for CIS?

  You need to register for CIS if you're a contractor who pays subcontractors for construction work. This includes businesses in the construction industry and those who spend more than £3 million per year on construction work.

  Subcontractors also need to register if they want to be taxed at the reduced CIS rate (20%) rather than the higher rate (30%). Registered subcontractors with gross payment status can even receive payments without any deductions.

  To register:

  • Contractors register before they first pay a subcontractor
  • Subcontractors can register at any time to benefit from lower deduction rates

  Our CIS compliance services help contractors and subcontractors in Kent navigate registration, submit monthly returns, and manage CIS deductions accurately. We handle the paperwork so you can focus on your construction projects.

• How do CIS deductions work?

  Under CIS, when a contractor pays a subcontractor, they must deduct a percentage of the payment and send it to HMRC. The deduction rate depends on the subcontractor's registration status:

  • Registered subcontractors: 20% deduction
  • Unregistered subcontractors: 30% deduction
  • Gross payment status: 0% deduction (no deductions made)

  Here's how it works in practice:

  1. The contractor verifies the subcontractor with HMRC before making payment
  2. The contractor deducts the appropriate percentage from the payment
  3. The contractor pays the subcontractor the remaining amount
  4. The contractor reports the deductions to HMRC monthly
  5. The subcontractor uses these deductions as advance credit against their tax bill

• What is Auto Enrolment?

  Auto Enrolment is a government scheme that requires employers to automatically enrol eligible employees into a workplace pension scheme and make contributions on their behalf.

  Under Auto Enrolment:

  • Employers must enrol eligible workers aged between 22 and State Pension age who earn over £10,000 per year
  • Both employer and employee make pension contributions (minimum total of 8% of qualifying earnings)
  • Employers must contribute at least 3%, with employees contributing at least 5%
  • Employees can opt out, but employers must re-enrol them every three years

  Auto Enrolment also involves ongoing administrative duties, including managing opt-ins and opt-outs, keeping records, and submitting regular declarations to The Pensions Regulator.

  Our payroll services in Kent include complete Auto Enrolment management. We handle enrolment, calculate contributions, manage employee communications, and keep you compliant with pension regulations.