At Hanley & Co. Accountants, we have compiled a month-end close checklist for small business owners. For more information, call us near Kendal on 01539 821869.

What is the Month-End Close?

The month-end close is the process by which companies verify, adjust and finalise their financial figures for that month. It is a systematic process of reviewing, documenting and reconciling all financial transactions that took place before starting the next accounting period.

A monthly closing process ensures accurate reporting and helps you identify any errors.

Reconcile Your Bank Accounts

The first job at month-end should be reconciling your bank account. This means checking all transactions recorded in your accounting system match the transactions shown on your bank statement. At first glance, this can sound very technical, but it is essential in keeping accurate records.

During this, you may uncover:

• Missing transactions
• Duplicate entries
• Unrecorded bank charges
• Direct Debits that have not been posted
• Payments received but not matched to invoices

Bank reconciliation gives you confidence that the financial information you are looking at is accurate.

Review Unpaid Customer Invoices

Once your bank accounts have been reconciled, take a close look at outstanding sales invoices. Unpaid invoices can quietly create pressure before they become obvious. One of the most common cash flow issues in small businesses is delayed payment, and month-end closes are the perfect time to chase overdue balances, send reminders, or follow up with clients.

The earlier you deal with an unpaid invoice, the better your cash flow will become.

Review Supplier Bills & Upcoming Payments

It is also important to look at what your business owes. Check outstanding supplier invoices, subscriptions, rent, and any other regular direct debits. A business may have money in the bank, but it doesn’t mean all of it is available to spend.

Reviewing your own bills and upcoming payments helps you to:

• Avoid late payment fees
• Maintain good supplier relationships
• Understand short-term cash commitments
• Plan spending more confidently

Check Your Cash Flow Position

Cash flow is often what determines a business’s stability. A profitable business can still experience serious pressure if cash is coming in too slowly or going out too quickly. At month-end, look ahead and find out:

• What money is expected during the next few weeks
• What major payments are due
• Will cash remain comfortable or could things become tight

Forms of cash flow include:

• Payroll & staff-related costs
• Cash receipts
• Your VAT position

Even a basic awareness of incoming and outgoing cash can help you make better short-term decisions.

Compare the Month with Previous Periods

Comparing the latest month with previous months helps you to identify trends, such as:

• Sales growth or slowdown
• Seasonal patterns
• Gradually rising costs
• Changes in customer payments behaviour
• Pressure on profit margins

Most financial problems build slowly, and a monthly comparison can often catch those changes early enough for you to act.

Contact Us

If you require accounting advice, contact Hanley & Co. Accountants near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post A Month-End Close Checklist for Small Business Owners appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at the difference between limited companies and sole traders. For more information, call us near Kendal on 01539 821869.

What is a Sole Trader?

A sole trader is a self-employed person who owns and operates their business as an individual. You have complete control over your business and financial decisions. From a legal standpoint, both you and the business have the same identity, so you have less protection over your personal assets.

Registering yourself as a sole trader is quick and simple. You only need to register for self-assessment tax.

What is a Limited Company?

A limited company is a separate legal entity from its owners. It is formed by registering as a limited company with Companies House. A limited company structure lets you own the company by holding shares in it, and offers limited liability protection for shareholders and directors, meaning personal assets are protected from business debts.

However, your company details are on public records, and there are more administrative and legal requirements. This includes annual accounts, corporation tax, PAYE etc.

What is the Impact on Your Personal Liability?

When operating as a limited company, your liability is significantly less. This is because you and the business are completely separate legal entities, should you run into financial issues.

However, as a sole trader, you have personal responsibility for debts incurred by your business, putting personal assets like your home and savings at risk.

When choosing to register your business, it is important to consider the level of financial risk you are prepared to face.

When Should You Consider a Limited Company?

Many startups will begin as sole traders. As your profits grow, becoming a limited company becomes more tax efficient. When your risks increase, limited companies offer more protection. Additionally, if you’re looking to grow, you have more financing opportunities.

Contact Us Today

No matter which business structure you choose, hiring an accountant is ideal in helping achieve your business goals. Having an accountant by your side means they can advise you and offer support.

If you require accounting advice, contact Hanley & Co. Accountants near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Limited Company vs Sole Trader appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at ways to simplify your business finances. For more information, call us near Kendal on 01539 821869.

Outsource Your Bookkeeping

Bookkeeping is the backbone of a business’s financial system and it involves recording your incomings and outgoings. It is one of the most important tasks you will have to undertake. However, it can also be time consuming.

When you outsource your bookkeeping, you are handing over your daily financial records to experts. Using the very best accounting software to track your income, expenses and transactions, you benefit from real-time access to your business’s financial health. Furthermore, you have peace of mind knowing that everything is fully compliant and up to date.

Tax Planning & Advice Avoids Costly Mistakes

Tax regulations are always changing, which means small businesses tend to fall behind easily. Missing a filing deadline or misunderstanding tax deductions can lead to hefty penalties. However, with support, you can minimise your tax liability and maximise deductions.

From VAT returns to Corporation Tax, a professional accountant ensures everything is handled efficiently. They will help you plan ahead, so you don’t face any unexpected tax bills.

Embrace Cloud-Based Accounting

Paper trails are a thing of the past. With modern cloud-based accounting platforms for Making Tax Digital, you have instant access to financial data, tough security, and easy integration with other digital tools.

Digital record-keeping not only streamlines processes but also guarantees real-time accuracy in financial records.

Gain Cash Flow Control

Cash flow is the lifeline of any business. Not having a clear picture of your cash flow can lead to issues, such as the inability to cover expenses, missed growth opportunities, or even insolvency.

Having a trusted partner to manage your cash flow is important. In doing so, you will receive regular cash flow reports, helping you stay on top of your business finances and avoiding surprises.

Hire An Accountant

Hiring an accountant is the best way to stay on top of your business accounts. An accountant will remind you of important tax dates and payments due and keep your accounts in the best shape.

At Hanley & Co. Accountants, we can provide tailored accounting services to your business. With many years of experience, we help you make better financial decisions.

Contact Hanley & Co. Accountants

If you require accounting advice, contact Hanley & Co. Accountants near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Ways to Simplify Your Business Finances appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at the latest dividend tax changes and what you need to know. For more information, call us near Kendal on 01539 821869.

What is the Current System?

In the UK, you can earn up to £12,570 a year without paying tax. This is known as the Personal Allowance. Once you exceed this threshold, you are taxed at between 20% and 45%, depending on your taxpayer status.

On top of the Personal Allowance, there is a separate Dividend Allowance where you only pay tax on any dividend income above £500.

Who is Affected?

These changes will affect company directors who are also shareholders who take income through dividends. It will also affect shareholders with investment portfolios outside ISAs or pensions, and those whose overall dividend income exceeds the £500 allowance.

Planning Opportunities to Consider

There are still legitimate ways to manage your tax liability on dividends. Some options include:

Making full use of ISA allowances for investments

Timing dividend payments across tax years

Pension contributions as part of a wider strategy

Reviewing shareholdings between spouses or civil partners

Practical Steps to Take Now

If you receive dividends, it is important to keep detailed records of all dividends payments you receive and check whether you need to register for Self-Assessment.

It is also important you review your tax position annually, to ensure previous advice still applies. Tax rules are ever-changing, and even a small change in your income or tax threshold can shift your position significantly.

How Can We Help?

At Hanley & Co. Accountants, we help clients with recent tax changes and how they may affect them. By providing clear and practical advice, we can support your tax or business matters.

If you are unsure how the dividend tax changes affect you, we are more than happy to help.

Contact Hanley & Co. Accountants

For advice, contact Hanley & Co. Accountants, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Dividend Tax Changes: What You Need to Know appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at how cash flow forecasting helps to prevent a business crisis. For more information, call us near Kendal on 01539 821869.

What is Cash Flow Forecasting

Cash flow forecasting is a way to predict how much cash your business has available at any time. The forecast involves mapping out your expected income and your upcoming expenses over the next few months.

A typical forecast includes:

Expected customer payments

Regular operating expenses

Payroll and tax obligations

Loan repayments

One-off or seasonal costs

By mapping these movements in advance, you gain visibility over where cash shortages or leftovers are likely to occur.

How Cash Flow Helps You to Prevent a Business Crisis

You See Trouble Before It Hits

The importance of cash flow forecasting is that it gives you a heads up. This gives you time to adjust spending and spot shortfalls before they appear.

You Can Make Smarter Business Decisions

Cash flow forecasting goes beyond knowing what is coming. Once you have an accurate forecast, you can customise it to suit your business.

Gives You Peace of Mind

The importance of cash flow forecasting is that you are making decisions with confidence. It gives you a clear understanding that shows where your business is going.

How Can We Help?

At Hanley & Co. Accountants, we can help you prepare your business with accurate cash flow forecasting. No matter your business model, understanding your cash position is essential.

Our experienced team works closely with business owners to develop accurate and practical forecasts; we can help prevent a cash flow crisis.

Contact Hanley & Co. Accountants

For advice, contact Hanley & Co. Accountants, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post How Cash Flow Forecasting Helps to Prevent a Business Crisis appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at PAYE and how it works. For more information, call us near Kendal on 01539 821869.

How Does PAYE Work?

Simply put, the PAYE system sees employers as a tax collector on behalf of HMRC. It deducts the tax an employee will owe on their wages, and send it to HMRC along with a report which explains the amount paid and deducted.

Employers operate PAYE as part of payroll, deducting tax and National Insurance before paying employees their wages. Other deductions that can be processed through payroll include pension contributions and student loan repayments.

Registering as an Employer

Before paying anyone, you must register as an employer with HMRC. This should be done before the first payday as it can take up to 15 working days. You will then be issued your employee reference number.

Additionally, some contractors also need to register for PAYE so they can become CIS registered.

What are my Reporting Responsibilities as an Employer?

As an employer, it is your responsibility to inform HMRC about the people you employ and how much you pay them. You will need to use special payroll software to submit this information. You will also need to inform HMRC if you no longer employ anyone and de-register from PAYE.

Under Real Time Information (RTI), employers must submit payroll information to HRMC on or before each payday.

Why PAYE Compliance Matters for Employers

PAYE compliance is more than a technical requirement. It also directly affects your business’s reputation and financial stability. Correct PAYE operation:

• Reduces the risk of HMRC penalties & audits
• Builds trust with employees
• Ensures accurate pension and benefit entitlements
• Demonstrates professionalism and good governance

From an employer’s perspective, PAYE is a continuous responsibility.

Contact Hanley & Co. Accountants

If you require accounting advice, contact Hanley & Co. Accountants near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Understanding How PAYE Works appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at what records a sole trader should keep for HMRC. For more information, call us near Kendal on 01539 821869.

Why Record Keeping Matters to HMRC

HMRC relies on your records to ensure you are reporting the correct amount of income, and only claiming legitimate business expenses. If you ever face an audit, you will be expected to provide evidence.

Beyond compliance, having good records benefits you directly as it:

• Helps you understand your profits
• Makes tax returns less stressful
• Ensures you never miss allowable expenses
• Protects you if something goes wrong

HMRC requires records to be complete and accurate. Here is what you should be tracking:

Records of all Business Outcome

Any money your business earns needs to be properly recorded. This includes:

• Invoices issued to customers
• Sales receipts
• Bank statements
• Online sales reports
• Cash income records

Income records help HMRC verify your turnover and ensure your tax calculations are correct. Missing records can lead to HMRC estimating your income.

Records of Business Expenses

Your expenses reduce your taxable profit, so it makes sense to claim everything you’re entitled to. These expenses lower your taxable profit and your tax bill. However, you need proof. Keep records of:

• Supplier invoices (e.g. stock, materials, tools)
• Receipts for every day business purchases
• Travel & mileage logs
• Rent for office space of business premises
• Software subscription invoices

HMRC does accept digital copies, just make sure they are legible.

Records of Income

You must also keep records of all money that comes into your business, so each sale and payment is recorded and your income tax liability and National Insurance calculations can be accurately calculated with the supporting documents. Keep records of:

• Sales invoices
• Receipts
• Bank statements
• Payment confirmations
• Other income

Switching to Making Tax Digital

Making Tax Digital is the Government’s ongoing programme to digitise and modernise the UK tax system. Coming into effect from April 2026, Making Tax Digital will be mandatory for sole traders with an annual income over £50,000. By April 2028, it will be £20,000.

This means that paper record keeping and tax filing can no longer be used, and accounting software must be. To ensure you are compliant, sole traders must use HMRC-approved software to maintain digital records and electronically file statements and tax updates.

Please Note: As a sole trader, you must keep copies of your records for a minimum of 5 years after January 31^st after the relevant tax year end.

Contact Hanley & Co. Accountants

For advice, contact Hanley & Co. Accountants, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post What Records Should a Sole Trader Keep for HMRC? appeared first on Hanley Accountants.

This is an attempt from Companies House to clamp down on fraud to improve the reliability of the data in their systems. This is a new legal requirement to be able to prove that you are who you say you are and will deter people attempting to use companies for illegal purposes.

Companies House have already been encouraging people to voluntarily register their identity with them and has been seen as a quick, easy and free of charge service. You may have already had emails from them regarding this.

Not all companies want to do this themselves though, and are instead looking to use an Authorised Corporate Service Provider (ACSP), such as their accountant. There are strict guidelines on how you can become an ACSP, such as the firm being supervised by a UK Anti-Money Laundering (AML) supervisory body.The good news is that we expect to be registered as an ACSP shortly, at which point we’ll be able to assist.

What does this mean for you?

This means that you have several options for verifying your identity with Companies House.

Option 1: You can do this directly with Companies House yourself and will not incur a cost. There are clear guidelines and information on what you need to do / what you will need on Companies House here.

Option 2: As we will shortly be registered as an ACSP we can send you an invitation to complete an online identity check using a government-certified identity service provider (IDSP). This will enable us to ensure you have completed the sufficient checks for Companies House. There is a small fee of £40 plus VAT for this to be completed. The electronic identity check requires you uploading your ID documents and conducting a live “selfie”.

Option 3: We can complete the check in person with you if you visit one of our practices. The fee for this is £75 plus VAT.

Important: whichever method you choose, you must ensure that you provide us the code you are given. If we don’t have your code we will not be able to file documents at Companies House for you (such as annual accounts, annual confirmation statements etc).? If we are unable to file documents on your behalf, then the company will be liable to late filing penalties. 

What do I need to do? 

You need to choose one of the above-mentioned options to verify your identity. We suggest doing this as soon as you can. There is a grace period for existing companies and directors, however as detailed above – failure to be identified could result in delays and/or late filing penalties.

If you have any questions, please email your accountant or call us on 01539 821869.

The post An Important Message for Limited Company Owners appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at understanding Corporation Tax. For more information, call us in Staveley, near Kendal on 01539 821869.

What is Corporation Tax?

Corporation Tax is the tax all limited companies must pay. It is a tax that’s payable against the profits your company makes. All profits are taxable. However, certain expenses can be deducted, and there are allowances to reduce your tax liability.

Corporation Tax applies to the following for limited companies:

• Trading profits
• Investments
• Selling assets

There are other organisations that may need to pay Corporation Tax despite not being limited companies. This includes:

• Housing Associations
• Membership Organisations
• Clubs & Societies
• Co-operatives/Clubs 

Corporation Tax Rates

Currently, the rate for Corporation Tax is 25%. However, this can change. If your company made more than £250,000 in profits, then you must pay the standard 25% rate.

If your company made less than £50,000 in profits, you are entitled to pay the lower tax rate of 19%. Marginal relief applies for profits between £50,001 and £250,000.

How to Register & File

Register for Corporation Tax

After setting up your limited company with Companies House, you must register for Corporation Tax with HMRC within three months of starting to trade.

Keep Accurate Records

Maintain detailed financial records of income, expenses, assets and liabilities. HMRC requires businesses to keep these records for at least six years.

Prepare Annual Accounts & a Company Tax Return (CT600)

Each year, your company must prepare statutory annual accounts and file a Company Tax Return. This reports your company’s financial performance and calculates how much tax is due.

Pay Corporation Tax

You have 12 months to file your Corporation Tax return, but payment is usually due nine months and one day after the end of your company’s accounting period.

Tips to Staying on Top of Your Corporation Tax

Keep Good Records

Maintain organised records of all income, invoices, expenses and receipts throughout the year. Staying on top of your bookkeeping ensures you claim your allowable deductions, avoid errors and file your returns easily.

Set Money Aside for Tax

Regularly setting aside some profits to cover your Corporation Tax ensures you’re prepared to pay HMRC on time. This avoids penalties and financial strain.

Claim All Allowable Expenses

Check you are claiming all allowable expenses, such as salaries, office rent, and equipment. Maximising your deductions reduces your taxable profits, so you pay less Corporation Tax.

Hire an Accountant

Working with a professional accountant can help you save time, stress and money. At Hanley & Co. Accountants, we ensure you are compliant with HMRC, file accurate tax returns and identify opportunities to lower your tax bill.

Contact Hanley & Co. Accountants

If you require Corporation Tax advice, contact Hanley & Co. Accountants in Staveley, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Understanding Corporation Tax appeared first on Hanley Accountants.

At Hanley & Co. Accountants, this month’s blog looks at common bookkeeping mistakes to avoid. For more information, call us in Staveley, near Kendal on 01539 821869.

Mixing Personal & Business Finances

Mixing personal and business finances is a common mistake that can have significant consequences. It can make it difficult to accurately track your business expenses and revenue, which can lead to missed deductions and overpaying taxes.

Failing to separate business and personal finances can also lead to legal issues, such as a HMRC investigation. To avoid this mistake, you should set up separate bank accounts for your personal and business finances. This allows for easy racking of business expenses and revenue.

Failing to Keep Accurate Records

One of the biggest mistakes is neglecting to keep thorough and accurate financial records. Keeping accurate records is essential for monitoring the financial health of your business, preparing tax returns and making business decisions.

If you fail to keep accurate records, it can lead to a number of issues. Your business may miss out on potential tax deductions and entitled credits, leading to tax overpayments.

Failing to Plan for Taxes

Taxes are a significant expense for small businesses, and failure to plan for them can lead to unexpected bills, penalties and fines from HMRC.

To avoid this, you should ensure that you plan for taxes in advance. Accounting software can be helpful in tracking your tax liabilities and automating your tax payments.

Leaving it to the Last Minute

When running a business, your bookkeeping is probably the least of your priorities. However, leaving it to the last minute can make your Self-Assessment and year end more stressful. Having a bookkeeping routine helps you to record transactions regularly.

Bookkeeping Without Expertise

Doing your own bookkeeping may seem like a cost-saving measure. However, it can lead to expensive mistakes.

At Hanley & Co. Accountants, we specialise in professional bookkeeping services. Using the latest accountancy software, we ensure that you are updated with your finances.

Contact Hanley & Co. Accountants

If you require bookkeeping advice, contact Hanley & Co. Accountants in Staveley, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.

The post Bookkeeping Mistakes appeared first on Hanley Accountants.