Accounting/tax software for UK - any advice?
Thread poster: Simon Lewis

Simon Lewis  Identity Verified
United Kingdom
Local time: 04:21
Member (2010)
Italian to English
Oct 8, 2011

I am moving my affairs to the UK and have pretty much decided to register as self employed and open a VAT position (reading through some historic threads here confirmed what I was afraid of - European agencies will not understand the UK's "business-friendly" approach and will assume an invoice without a VAT no. is not legitimate and an attempt to evade taxes).

Looking at HMRC's website I get the impression that registration is not an issue (although any advice would be gladly appreciated, particularly from those who have managed to escape the clutches of the ravenous Italian tax system). In fact it looks like everything is eminently manageable by oneself, leading me to the crux of my question - can anybody recommend any good accounting software?

I know it would be far more sensible to just go to an accountant, but I am not wired that way ... A cursory glance at Amazon shows plenty of options, but I get the impression that tax returns would be handled separately from day-to-day invoicing and VAT returns. Does anybody know of the existence or have any direct experience of a complete package for the self employed? If not, please in any case share your experience of DIY accounting/tax filing, any advice will be very welcome.

Cheers,

Simon

[Edited at 2011-10-08 21:49 GMT]


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Tom in London
United Kingdom
Local time: 03:21
Member (2008)
Italian to English
my comments Oct 8, 2011

Simon Lewis wrote:

what I was afraid of - European agencies will not understand the UK's "business-friendly" approach and will assume an invoice without a VAT no. is not legitimate and an attempt to evade taxes).


Not true Simon. I work exclusively with clients and agencies based in other EU Member States and I have never experienced what you describe. I am not VAT-registered.


Simon Lewis wrote:

it looks like everything is eminently manageable by one's self


Yes, but not straight off. The first thing is to get registered with HMRC and that is best done by a chartered accountant, to make sure you've started off on the right foot with the authorities. THen for at least the first year I would strongly advise retaining the accountant so that you're sure you understand your responsibilities in terms of book-keeping and correctly filling out your tax return. You need an accountant of the type who will teach you how to do this yourself.

I know it would be far more sensible to just go to an accountant, but I am not wired that way


You may not be wired that way, but the system relies on you not making any mistakes with your bookkeeping and tax returns, national insurance, VAT if you register, etc. You need to be well-organised to do this properly, every month. Are you?

I get the impression [that tax returns would be handled separately etc etc]


Simon, you can't rely on your own impressions. Get it right from the beginning, and looking after your own tax affairs should be relatively straightforward. Get it wrong and you'll get yourself in a mess.

If you're going to be in London and need an accountant, email me privately and I might be able to give you a name.

[Edited at 2011-10-08 21:17 GMT]


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Simon Lewis  Identity Verified
United Kingdom
Local time: 04:21
Member (2010)
Italian to English
TOPIC STARTER
thanks Tom Oct 8, 2011

Hi Tom, thanks for your input. I have to say I expected mostly replies in this vein (e.g. don't be a bloody fool and just stump up for an accountant!). I will drop you an email, thanks very much for your offer.


Tom in London wrote:
Not true Simon. I work exclusively with clients and agencies based in other EU Member States and I have never experienced what you describe. I am not VAT-registered.


I'm surprised you say this, though. I read several threads where people basically said many Spanish agencies would refuse to accept providers without VAT #s, even though it is legally perfectly OK for those based in the UK not to use one. Do you really think Italian agencies and accountants would just accept a change from an Italian VAT invoice to an invoice with no more than a UK address and bank account # on? Did you have a PI before moving to the UK?

Simon Lewis wrote:

it looks like everything is eminently manageable by oneself


You need an accountant of the type who will teach you how to do this yourself.


That's why I'm interested in accounting software - I know many small businesses do things themselves, and I imagine the software guides you through everything you need to do fairly painlessly. But it would be interesting to hear from someone with experience using sage or quicken or whatever as to whether they're suitable for a UK freelance translator.

I know it would be far more sensible to just go to an accountant, but I am not wired that way


You may not be wired that way, but the system relies on you not making any mistakes with your bookkeeping and tax returns, national insurance, VAT if you register, etc. You need to be well-organised to do this properly, every month. Are you?


Obviously I'm planning to be, but again I would hope the software would guide me through it.

I get the impression [that tax returns would be handled separately etc etc]


Simon, you can't rely on your own impressions. Get it right from the beginning, and looking after your own tax affairs should be relatively straightforward. Get it wrong and you'll get yourself in a mess.


I probably wasn't clear here, I was speaking in terms of software - ideally there would be a package which would handle all accounting and tax filing, but I suspect one would need a package for day-to-day invoicing, accounting and VAT returns and another piece of software to do the self-assessment return.

If you're going to be in London and need an accountant, email me privately and I might be able to give you a name.

[Edited at 2011-10-08 21:17 GMT]


[Edited at 2011-10-09 13:53 GMT]


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Tom in London
United Kingdom
Local time: 03:21
Member (2008)
Italian to English
more Oct 8, 2011

Simon Lewis wrote:

I read several threads where people basically said many Spanish agencies would refuse to accept providers without VAT #s
.

Yes, I've heard that too. It must be a Spanish thing. I hardly ever work with Spain but when I do, I've never had any problems.

Do you really think Italian agencies and accountants would just accept (....edited...) an invoice (....edited...) with no more than a UK address and bank account # on?
.

They are legally required to, although it helps to specify on your invoices that they accord with UK fiscal requirements and that VAT is not applicable. I never have any issues.

Did you have a PI before moving to the UK?


Yes, but I don't now. The much simpler and much more accessible tax system, and the public administration in general, were deciding factors in convincing me to relocate back to the UK. Years of working in Italy had addled my brain. Perhaps you've been affected as well.

I'm interested in accounting software


You don't need it. All you need is Excel. That's all I use.

I would hope the software would guide me through it.


You can't rely on software to think for you. First, you need to understand what you're doing. Especially if Mr. Tax Inspector has any questions.

Also, I imagine the software would be expensive and would need to be updated every year. I once saw an interview with the CEO of Sage, and in fact he said that after-sales service is where they make their big $$$- they lure you in, and then never let you go. Ask yourself if you can afford this.

[Edited at 2011-10-08 22:49 GMT]


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Gillian Searl  Identity Verified
United Kingdom
Local time: 03:21
Member (2004)
German to English
software? dont bother - save, save, save! Oct 9, 2011

Hi Simon, Over the years my bookkeeper (dad) and I have tried various types of software and they all seem to complicate matters more than necessary. I wouldn't recommend any of them. I save all the details in Excel and dad uses one software or another to make the invoices look good. After that, I think they just complicate matters unnecessarily. We end up taking the figures back out of the software into Excel for sending to the accountant at the end of the year.

My big warning for freelancers earning significant amounts is summarised in this phrase "payment on account". Here's the scenario:
In this tax year, which ends April 2012 you submit a tax return that says, e.g. you owe £10,000 in tax. You submit online and leave it til the last minute (Jan 2013). On 31 Jan 2013 you not only have to pay the £10,000 you owe, you have to pay 50% extra as the payment on account. Which means you discover late - really late(!) that the bill on 31 Jan 2013 is actually £15000 not £10,000. 150% of peanuts is peanuts, 150% of a significant amount is way too much to cope with at short notice. So start saving as soon as you transfer the business to the UK and submit your first tax return as early as you can otherwise the problems, i.e. debts to HMRC, will mount up really fast. And I dont know about Italy but I pay way more tax here than I did in Germany - why? Because you can't offset nearly as many expenses as in Germany.
Gillian


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Tom in London
United Kingdom
Local time: 03:21
Member (2008)
Italian to English
Yes Oct 9, 2011

Yes- I forgot to mention those little details described by Gillian. Although we don't all have a Dad to do our book-keeping!

Of course if you do pay too much tax in one year, you get it back the next. But you DO have to pay it, so yes, save save save!

One of the good things about the UK system is that many months in advance they send you a statement of how much you'll need to pay. Then they follow it up about a month before payment is due.

[Edited at 2011-10-09 09:52 GMT]


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Charlie Bavington  Identity Verified
Local time: 03:21
French to English
Wiring Oct 9, 2011

Simon Lewis wrote:

I know it would be far more sensible to just go to an accountant, but I am not wired that way ...


Me neither. I read a couple of books, went on a course run by HMRC (way after I'd started, but it confirmed I wasn't missing anything) and I manage it all under Excel. HMRC do in fact recommend some packages that will, it seems, manage the whole shebang going as far as actually submiting your annual return for you - at least, that is the impression I get from the online returns section of their website. As you can tell, I don't actually use them.

It rather depends on your attitude to knowing your financial position. My spreadhseet calculates my tax and NI liability to within a few pence of what HMRC make it (the difference being entirely down to when rounding is applied, which I can't be bothered to fix). That's just me, I like to make sure I understand my tax bill fully. Other people don't. Horses for courses, and all that, natch, but in truth, if you are actually wired in such a way that means you want to understand your financial affairs fully, doing self-employed tax is well within the range of a man who knows his way around a spreadsheet. However, the rider is that you do need to be in a posiiton to keep up with changes, e.g. there was a recent discussion on here that showed that some people were unaware of the annual investment allowance, introduced in 2008. There are other forums for such things. You just have a weigh the time up against the cost, which, as far as I can tell seems to range from about 300 to 1,000 quid a year. And the value to you of knowing your own finances inside out, of course. For which, accountant or no accountant, you remainly entirely liable, AFAIK.

FWIW, you don't need an accountant to register as self-employed. You just need to do it within 3 months of starting trading, I think.


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David Young  Identity Verified
Denmark
Local time: 04:21
Danish to English
Finance software Oct 9, 2011

Hi Simon
I also don't think you need to go to an accountant, not as a sole trader (ordinary self-employed individual). But you do need to be sensible and make sure you have clear financial records and file all your business related receipts and keep them for however long it is they stipulate nowadays (used to be 7 years). Then, if HMRC decide to pick you to swoop on and do a spot check, you have everything. Otherwise, I think UK tax returns are fairly straightforward. I moved to Denmark 9 years ago and I've managed to cope with the Danish tax system without any problems.
As for software, I started using something called Quicken for personal finance many years ago, and it still works Mind you, I have an accounting background so I know how to tweak it. But my wife doesn't and she has never had any problems with it. It's very user-friendly and you can name the income/expense categories yourself. I'm not sure that Quicken is available any more in the UK, but you can find it on eBay. I'm using Quicken Deluxe 2000. You need to be careful not to buy US editions. The last UK one was 2004 according to Wikipedia. They still do something called Quick Books in the UK - I assume it's a business version. I'm thinking of setting up a UK limited company (so I've also been looking around for something) and I would have no hesitation using the basic version of Quick Books for that. Or I might take a look at this one: http://www.moneybox.ai/ because it enables me to convert my old Quicken data - it's only £30 a year (tax deductible!)
The best seller in the UK is (I believe) Sage who offer a basic PC version for £99 and online for £9 per month. I think most UK accountants would be happy if you used Sage, because they are familiar with it.
Good luck.


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Simon Lewis  Identity Verified
United Kingdom
Local time: 04:21
Member (2010)
Italian to English
TOPIC STARTER
hmmm... Oct 9, 2011

Interesting comments, thank you all.

Definitely a good point about saving for the payment on account, although it can't be as bad as Italy where I have heard of people who have basically had their entire income wiped out for the first year or two as they pay their 50-60% taxes and SS and then a hefty down-payment on the next year as well!

I'm still inclined to think that it's manageable without an accountant, although of course VAT would add an extra complication. I may go with Tom's suggestion and try insisting that it's not necessary, and of course if I come up against a brick wall I can always open a position. Charlie, are you VAT registered? If so, do you do the returns with your spreadsheets as well? Of course HMRC require everything be filed online, do you just copy your figures into their online forms for VAT and self-assessment returns? And are they fairly self-explanatory (once one knows the basics, of course)?

The idea of HMRC courses, books and cheap software are all excellent, I think I may give it a try and then if I'm hopelessly lost when filing time comes around I can always bite the bullet and go to a professional.

Cheers!


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Charlie Bavington  Identity Verified
Local time: 03:21
French to English
Some yeses for you :-) Oct 9, 2011

Simon Lewis wrote:

Charlie, are you VAT registered? If so, do you do the returns with your spreadsheets as well? Of course HMRC require everything be filed online, do you just copy your figures into their online forms for VAT and self-assessment returns? And are they fairly self-explanatory (once one knows the basics, of course)?

Yes, I am. Yes, I do. Yes again. Fairly self explantory, yes, although I found I needed to give it a couple of hours reading to understand exactly what was required the first time round.


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Tom in London
United Kingdom
Local time: 03:21
Member (2008)
Italian to English
Not necessarily Oct 9, 2011

Simon Lewis wrote:

Of course HMRC require everything be filed online


Not necessarily. I don't know where you're getting your information from.


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Sergei Tumanov  Identity Verified
Local time: 05:21
English to Russian
+ ...
quickbooks Oct 10, 2011

and quickbooks

:0)

or (if you need something simpler)
http://www.amazon.co.uk/Collins-4161-Account-Employed-Pages/dp/B000J6FC3A


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Simon Lewis  Identity Verified
United Kingdom
Local time: 04:21
Member (2010)
Italian to English
TOPIC STARTER
quickbooks, quickbooks ... Oct 10, 2011

Sergei Tumanov wrote:

and quickbooks



So, quickbooks then? Thanks, I'll check it out.

Tom, you're quite right, you can still file self-assessment offline. I was thinking of VAT returns, for which they are phasing out the possibility, but I would imagine they'll do the same for the self-assessment sooner or later


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Accounting/tax software for UK - any advice?

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