Money Laundering Laws

In this article, please find the information provided in the e-mail sent to all client’s with regards to the new Money Launder Laws.

Changes that have been made

The first bit of information that you need to be aware of is something that we have been expecting for several years, and we are very happy about. Bookkeepers, indeed any business that offers financial services in any way, are now classed as a “regulated profession”. This means that to legally offer such services, Bookkeepers (individually) must now have a valid practicing certificate issued by a supervisory body registered with HM Treasury or be registered directly with HMRC. Ihelm Enterprises has had a valid practicing certificate for several years through my membership with the Institute of Certified Bookkeepers. For reference, my membership number is 61153985 and my practice number is¬†304657.

Whilst this doesn’t mean there will be any changes in the services we offer, it does mean that the industry as a whole is now answerable to HM Treasury and the government under several new legislations – the prime one is the Money Laundering Act that was passed in December 2007. Our delay in implementing this fully has been due to awaiting the Act to be interpreted by the associations and the pertinent parts to be disseminated to ourselves.

This does mean that Ihelm Enterprises must take more responsibility for understanding your business finances and you, our client, in order to protect you, ourselves and the government from illegal activities that can occur.

The Money Laundering Law (in simplistic terms)

There are three principal money laundering offences which are contained in sections 327, 328 and 329 of the Proceeds of Crime Act 2002.

There are also similar offences created under the Terrorism Act 2000 – section 15, 16, 17, and 18.

Depending on the type of business that you are, we will require different things – these are listed below – along with the reason for us requiring these items. Unfortunately, if we cannot obtain these items from yourself than by law, we may have to terminate your contract with us. Please don’t hesitate to contact us for more information.

If you are a Sole Trader/Partnership:

If you are in a partnership we will require all of the information below for each partner.

1) Please confirm your Home Address and if application your Trading Address if different:

2) Size and Sources of your capital to date and any future sources or predictions for your capital. This relates to any money you invest into the business either your own funds or from borrowing it from other sources.

3) The size of your personal income and source in the past, and predicted personal income in the future. If you are employed by another business, alongside running your own business, you will need to provide information relating to your earnings from the other business.

4) Confirm the type of business you are in, and the sector your business is in.

5) Have you ever been subject to bankruptcy proceedings? If so, can you give some details?

6) Have you ever been disqualified as a director of a company?

7) Can you confirm that you have registered with HMRC as a sole trader?

We are required to see proof of identity as part of the Money Laundering Regulations. This is because we have to indicate that we have identified yourselves and that you are who you say you are.

We will need you to send us either 1 piece of photo identity and an additional piece of evidence, or 1 piece of non-photo identity, proof of address or date of birth PLUS an additional piece of evidence.

List 1: Evidence of Identity

Acceptable Photo Identity:

i) valid passport; or

ii) valid photocard driving license (full or provisional); or

iii) national identity card (non-UK nationals issued by EEA member states and Switzerland); or

Acceptable Non-photo evidence of identity:

Documents issued by a government department, incorporating the person’s name and residential address or their date of birth,

i) a current UK full driving license old version (not provisional licenses); or

ii) evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax benefit), tax credit, pension, educational or another grant; or

iii) documents issued by HMRC, such as PAYE coding notices and statements of account (NB: employer issued documents such as P60s are not acceptable); or

iv)end of year tax deduction certificates

List 2: Evidence of address or date of birth

i) instrument of a court appointment (such as a grant of probate, bankruptcy); or

ii) current council tax demand letter or settlement; or

iii) current (within the last 3 months bank statements, or credit/debit card statements issued by a regulated financial sector firm in the UK, EU, or JMSLG equivalent jurisdiction (but not those printed off the internet); or

iv) a file note of a visit by a member of the firm to the address concerned (“home visit”); or

v) an electoral register search showing residence in the current or most recent electoral year (can be done via http://newcorp.192.com/search/index.cfm); or

vi) a recent (last available) utility bill (gas, water, electricity, telephone – not mobile phone bills); it must be a bill or statement of account (not correspondence); or

vii) valid photocard driving license (full or provisional); or

viii) a current UK full driving license old version (not provisional licenses); or

ix) evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax benefit), tax credit, pension, educational or another grant; or

x) documents issued by HMRC, such as PAYE coding notices and statements of account (NB: employer issued documents such as P60sare not acceptable); or

xi) a solicitor’s letter confirming recent house purchase or land registry confirmation (you must also verify the previous address)

If you are a Registered Company (e.g. Ltd):

1) Please confirm your Registered Company Name (as appears on Companies House):

2) Please confirm the company registered address and the main trading address if different:

3) Please, can you let us know the basic structure of your company. E.g. who controls and manages it – directors, shadow directors etc.

4) Has the company been audited in the past, if so were the accounts qualified? If they were qualified can you let us know who qualified the accounts?

5) In order to ensure we comply with the regulations, we require the following information if available. If it isn’t available please let us know why. We will return all documents by signed-for delivery within 2 days):

i) Certificate of Incorporation

ii) List of Shareholders

iii) List of people who have voting rights with their shares in the company

iv) Your position in the company

v) Your name

6) The main source of income for the company:

We will need to take copies of the information and store it in your client file. Every year we will be asking you to verify the information is still correct and to notify us of any changes.

Why should I use a Bookkeeper?

April is a busy month. It begins with it April Fool’s Day, No Housework Day (don’t miss that one!), Earth Day and occasionally Easter. It’s also the start of the new tax year, which means that it’s the perfect month in which to look at how you manage your business finances and whether additional support could help you.

What is a bookkeeper?

A bookkeeper isn’t an accountant though the two usually work very closely together. It’s important not to get the two confused. They maintain financial records and keep track of accounts, recording transactions and checking that everything is accurate and up to date.

They’ll check that your accounts match up to your current bank balance and that you’ve not lost money without recording where it’s gone, and with a knowledge of tax returns they can also help you to properly evaluate what you can claim and what you can’t (though it’ll be your accountants job to ensure that you’re running a tax-efficient business).

They can generate reports and collate all of your financial details to send on to your accountant if you’ve got one. Essentially, your bookkeeper deals with what you buy, sell, earn and pay.

whyshouldiuseabookkeeper2

Do I need a bookkeeper?

It’s certainly possible to run a small business without using a bookkeeper. If you can keep track of your own income and outgoings then you might decide that a bookkeeper is an expense that you don’t need.

Yet, a bookkeeper could be a valuable asset to your business if you’re not sure that you’re accurately recording your income and your expenses. It’s possible that you’re losing money without realising, that you’re forgetting to invoice clients or to chase up those invoices and that you’re not keeping records of all of the expenses that you should record to reduce your tax bill. If you can’t be 100% sure that you’re running your company finances efficiently then a bookkeeper could help you to get things in order.

Your bookkeeper can also help if you know that you’re looking after your company finances correctly, but it’s taking 20 minutes out of every day. Over the course of a working week, you could lose more than an hour of your time, and it could be better spent doing what you‚ are supposed to be doing.

Imagine that your time is worth £40 per hour to your business. If you’re wasting upwards of 100 minutes a week looking after your financial records, then could you save money by hiring a bookkeeper? It’s very likely that, when you really think about it, you’re spending far more than 100 minutes per week trying to keep your financial records up to date.

What if I already have an accountant?

If you already have an accountant then you might think that a bookkeeper is a waste of time. After all, your accountant is looking after your company’s financial records.

Here’s the problem:

Jane is a bookkeeper. She charges £20 per hour for her services. She gets financial records in order so that they can then be passed on to an accountant, saving the accountant hours of work.

James is an accountant. He works for £50 an hour. When he receives documents from a bookkeeper, his work takes half the time it otherwise would.

Fred is a business owner. He’s currently paying his accountant, James, £200 per month for four hours of his time. James is spending two of those hours doing bookkeeping tasks for £50 an hour, and the other two are spent doing his accountancy work. Fred could cut his costs by working with Jane. She would do those first two hours of work for a total of £40, and Fred would only have to pay £100 to James. Overall, he’d save himself £60 per month.

How do I find a bookkeeper?

If you’ve decided that a bookkeeper could help your business, then how do you go about finding one?

It’s important to decide if you actually feel the need to meet with your bookkeeper regularly. If not, then consider working with a virtual bookkeeper. You can send documents by mail and communicate with your bookkeeper online and over the phone, which saves you even more time.

Alternatively, a search online for a local bookkeeper should provide you with some choices – make sure that you give your bookkeeper a call and get to know them and their business, as you’ll be handing over a lot of important financial details.

What are your experiences of working with a bookkeeper, and when did you decide that a bookkeeper was a valuable investment for your business? Would you work with a virtual bookkeeper?

Small Business Bookkeeping

financialgraphics
Are you a small business and:

  • trying to run your business
  • develop your product or service
  • market your business
  • deal with the day-to-day bookkeeping

It isn’t always easy to do everything that needs to be done when you are running your own business, which is why it is a great idea to outsource the things that you aren’t very good at, so you can spend your time more wisely and focus on what you do best, which is sell your business! However, I know it isn’t always easy to just outsource everything, as there are costs when you do that, and if you are just starting out, the cash isn’t always available.

So what do you do if you can’t outsource? You have a couple of options – you could find someone who is trained and has experience in the field you want to outsource – let’s say bookkeeping in this case, and you can see if you can come to a mutual working agreement, where maybe instead of paying with cash, you trade services. This can work really well as long as both parties agree to terms beforehand and both parties feel they are getting a mutually benefitting deal.

Another option is to try and learn how to do some of the things you aren’t very good at, without spending a lot of money. So you could join a facebook group, or follow people on twitter, and read blogs that are published providing easy to follow tips. People who are experts in their field won’t always give away all of their secrets, but you can pick up some very good hints and tips on how to do the basics in things like marketing, publishing a website, handling the bookkeeping and accounts, and many other aspects that businesses need to be involved in.

At Ihelm Enterprises Limited, we offer bookkeeping and payroll for any sized business, and we are more than happy to speak with you and arrange an alternate type of payment, or even a payment plan. Our aim is to take away the stress and frustration of dealing with the day to day bookkeeping so that you can focus on your business and doing what you do best.  Why not contact us via the contact form on the website, our Facebook Page, or on Twitter (@ihelmenterprise) and see how we can help you with your small business bookkeeping.

Tips for Businesses on Keeping Good Records

Why is it important for a business to keep good records? There are many reasons to do this but here are the top three reasons I believe it is important:

  • HMRC Tax Inspections
  • easier to find information
  • less stressful at tax return time

When a new client approaches me and asks how I can help them with their bookkeeping and financial record keeping, I always ask them whether they have separate bank accounts, PayPal accounts, etc for their business. It makes it so much easier to know exactly what funds your business has if the bank account is separate to their personal accounts. It will also cut down on the queries that I may have, as I won’t continually be asking whether something is for personal or business use. If you do use your business account to buy something personal, please make a note of it, as again this cuts down on any queries. It is also a very good idea to file all of the bank statements in a binder, with a section for each different account.

Another top tip is to keep all of your receipts and invoices in a folder for each month. Separating them out by month, before you give them to your bookkeeper or accountant, means they will need to do less work as they won’t need to sort out the receipts. Here are a few time-saving tips for dealing with receipts and invoices:

  • If you have paid for something personally, write it on the top of the receipt – it’s a 5-second job and can save valuable time later on.
  • If you have bought a mixture of business and personal items at the same time, highlight either one and make a note on the receipt as to what the highlighted ones are.
  • Keep purchase invoices and sales invoices separate, and separate them out by paid and unpaid

The final tip, and I think this is probably the most important, is to get your processes set up and in place straight away. If you get into the habit of sorting out your accounts on a monthly basis, or even weekly, it will save a lot of frustration when it comes time to file your return. It will also save you money if you are using a bookkeeper or an accountant, as they will be working on your accounts throughout the year, instead of in one big chunk.

All of the above tips will help your business to run smoother, and help you be less stressed. They will make it easier for HMRC to find information if they do a tax inspection as everything will be in one place. Being able to find information quickly is very important when it comes to finances because the information can tell you so many things:

  • do you need to register for VAT
  • do you have the money to grow your business
  • who you owe money to
  • who owes you money
  • and many more

The financial information all being organised and in one place can also help to prepare your accounts ready for filing your tax return. If the records are all over the place and disorganised, it can cause you to use up valuable time, and money, in making sure everything is entered into the accounts.

Would you like to know how I can help you get your accounts in order and keep them that way? Contact me via the contact us page, or on Facebook or Twitter.

The Basics of Bookkeeping: Lesson 1

Bookkeeping, a word that instils fear and panic in thousands of small business owners. I am here to help allay some of that fear by helping you to understand the basics of bookkeeping.

The first thing that you need to understand is that proper bookkeeping is essential to every business and if you ever get to the point where you just aren’t able to devote the time to do it properly or are struggling to understand what needs to be done, you should find a qualified bookkeeper who can help you.

Bookkeeping is based on the double-entry system – money comes in, but it also goes out. Every transaction must have a two-sided entry. These two sides are known as Debit (DR) and Credit (CR). For each transaction, the DR side must equal the CR side. For example, if you buy a pencil for 10p, you have paid money out but have also gained a pencil.

DR Stationery 0.10p
CR Cash                              0.10p
purchase of a pencil

A very simple way to start keeping your records is to use a pen and paper and to use T-accounts. Set up each account (Cash, Stationery, Sales, etc) as a T-account with one side as the Debit side and one as the Credit Side.

taccountsexample1When you enter a transaction assign a number to it so that you can find both corresponding entries. You also need to make sure you date your entries.
taccountsexample2

Here is an example of how to record a sale. You make a sale of £5.00:
taccountsexample3

All of your T-accounts now look like this:
taccountsexample4

At the end of each month, total up each T-account. The total DRs should equal the total CRs.
taccountsexample5

Total DRs = £5.10p
Total CRs =                         £5.10p

Using T-accounts is a very simple way to keep track of your accounts.

Lesson 2 will look at the different types of accounts: Assets, Expenses, etc.

If you have any questions on today’s lesson, or would like help answering other bookkeeping questions, please leave a comment below or contact us via the Contact Us Page, our Facebook Page, or on Twitter.

Shh…A Bookkeeper’s Secret

When people ask me what I do for a living, the majority of people give me a look of sympathy and some even get a look of disgust on their face. I’m going to tell you a secret though….I LOVE BOOKKEEPING!!

I have always had an affinity for numbers right from a young age. In high school, I loved algebra and calculus. I didn’t enjoy geometry or statistics quite as much, but give me complicated equations to work out and I was a happy girl. I think my interest in bookkeeping actually started when one of my older sisters took an accounting course in high school and I watched her do some of her homework. I took that course myself and I was hooked. It was my first proper introduction to the world of bookkeeping and I learned about the very basics that I talked about in The Basics of Bookkeeping: Lesson 1.

I didn’t actually take any further accounting courses until my second year of university. I then moved to the local college and excelled at all of the courses I needed to take. I graduated with a Business Administration Accounting degree- I was qualified to do bookkeeping.

Strangely though I didn’t do any bookkeeping until I moved to the UK in 2003, when I did a home learning course to brush up on my skills.

Bookkeeping is all about numbers and numbers can tell a story. When all of the receipts, invoices and all of the other financial information is entered into a set of accounts properly, you get a story about your business. Just like an author, a bookkeeper writes story, but in numbers

So there is my secret – I LOVE NUMBERS & BOOKKEEPING. I am doing exactly what I love.

If you would like to know how I can help you tell your business story, contact me via the Contact Us Page, our Facebook Page, or on Twitter.

Are you a UK Business Owner and use QuickBooks Online Simple Start, Essentials or Plus?  Are you unsure of how to use the software correctly?

If so, why not take a look at the 5-Day Online Video Training Course I have created to help UK Business Owners learn how to use the basic features of QuickBooks Online?

Over the course of 5-days, you will be guided through how to set up your products and services, how to set up for VAT, how to invoice customers and receive payments, how to track purchases and expenses, how to properly use the bank feed, and how to access some of the most common reports that every business needs.  You will have access to this course for life, so you can work at your own pace and keep going back to it!

For a one-off fee of £79.00, you will receive full access to the course and can continue to return back to it anytime you need to!

Visit: https://courses.ihelm-enterprises.co.uk/courses/the-basics-of-quickbooks-online-a-5-day-training-course/ to read more about the course and buy it today!


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