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Business Start up - advice please!!

IngeniusIngenius Feels At HomeRegistered Posts: 30
I have a friend who is intending to start up a fire engine limousine hire company - as a partnership. I would like to be able to set up and manage his accounts for him. I feel that this will be good experience for me so i'm looking for some further advice as to how easy this will be for me to do.

I'm currently half way through Foundation level of my AAT and working on U.34. Just so you know where i currently am with my accountancy knowledge.

I have spoken to HMRC VAT Helpline today and understand that this particular method of 'passenger transport' will be zero rated for VAT. I was advised to read up on partial exemptions as they might not be able to reclaim any input VAT?? This is all of course if they register voluntarily for VAT as i doubt the company turnover will hit £68k in 1st 12 months of trading.

In a nutshell i know the basics of what needs to be done records to keep etc. Any help and advice anyone can give me will be much appreciated!!!

Comments

  • LilyflowerLilyflower Feels At Home Registered Posts: 54
    In my understanding, once you have successfully passed Foundation level you are a bookkeeper and can manage PLCA, SLCA etc.

    you cannot (due to a lack of skills learnt) manage all the accounts this type of business will likely need, such as depreciation which is not covered until Intermediate.

    Plus, unless you have done previous study on this - if he has staff on his payroll, you are not going to be able to correctly account for PAYE, NIC etc for the employees nor the employer.

    Therefore, again if my understanding is correct, you will only be able to be a bookeeper (PLCA/SLCA clerk etc) for him and he will require an accountant (full AAT qualified) to complete his books, manage his BS, P&L and cash flow statements etc to correctly ascertain his profits and subsequently what Tax he will pay to HMRC at the end of the reporting year.

    Lily xxxxxxxxxxxxxxxxxxxxxx
  • IngeniusIngenius Feels At Home Registered Posts: 30
    Thank you so much for your comments Lily!

    I asked as my manager seemed certain that this is something i would easily be able to do. He has also said that he would help me once i had actually set up the accounts and registered the business.

    The business doesn't actually have any employess but i'm fully qualified in payroll as previously did IPP diploma in payroll management and have been doing payroll for 9 years now for all my sins!!

    I didn't think i would be able to fully manage the accounts as my boss was telling me (he's a Financial Controller aswell!!).

    Thanks again Lily - much appreciated!!

    Kim xxxxx
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    If it is such that the vehicle does qualify for the zero rated VAT on passenger transport then it would be worth registering voluntarily as you would nearly always get a refund of VAT.

    As for having the necessary skills. Well if AAT foundation is your only accountancy experience then no. Well not without an accountant. There are quite a lot of considerations that need to be taken into account with this business. Such as it's VAT position, partnership agreement, founding of the business and assets and more.

    I would be advising to seek professional help.

    If you can get some involvement to get some practical experience then that might be helpful to your career.

    Best of luck
    Regards,

    Burg
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