Accountants for Travel Agents: Everything You Need to Know
The UK’s travel industry is highly regulated. It is one of the specialist sectors that are always on the spotlight. That is why you need to be thoroughly informed about the accounting policies that affect your travel agency. Bear in mind that a wrong decision can easily lead to dire financial and even legal consequences.
For example, if you fail to file your tax returns before the stipulated deadline you will be eligible for a penalty and possibly interest on the same penalty. Such unnecessary and avoidable expenses may affect your cash flow and liquidity gravely. That is why most big travel companies have internal accounting departments to help with such matters.
Unfortunately not all travel agents can afford that. The good news is that you can still get a professional and affordable accountant to advise you accordingly. That is, in fact, the best way to go about handling your accounting and tax matters. Having said that, it will help if you have some background knowledge on the same. Here we have covered the basics regarding accounting and tax requirements for UK travel agents.
Self Assessment Returns and Dates
The self assessment system is used by HM Revenue and Customs (HMRC) to collect tax from individuals. As a travel agent, it means you are either self-employed (sole trader) or a partnership. Your tax won’t be deducted automatically as is the case with wages, pensions and savings. That means you will have to do the return yourself (hence the term self-assessment). You can either do that online or send a paper form. The deadline for making online tax returns is 31st January while that for making paper returns is 31st October. Regardless of how you make the returns, you should pay the tax amount you owe by midnight, 31st January.
There is an exception though if your travel agency is a limited company whose accounting year ends on any date. In that case the deadline for making your online returns will be exactly 12 months from the first day of your accounting year. The deadline for paper returns will be 9 months and one day after the start of your accounting year.
If you miss the deadline you will be charged a £ 100 fine. The amount will be more if your tax return is more than 3 months late. If your agency is a limited company you may receive a letter from the HMRC telling you how much they think you should pay. That is referred to as a tax determination.
What are Allowable Expenses
On paper, you are mandated to pay tax on all the moneys you spend on running your travel business. But that is not always the case, the HMRC will not charge you tax on certain costs. Such costs are known as allowable expenses and they help keep your business running efficiently.
The most common allowable expenses for a travel agent include travel costs, office costs, clothing (if you wear uniforms), financial costs (like insurance or banking charges), advertising and costs incurred from maintaining business vehicles. You may also be exempted from paying tax on capital assets that double up as personal property. For example, if you use your personal car to move clients from place to place it can qualify as an allowable expense as a mileage log expense. You can contact GM professional accountants for a full list of allowable expenses because they vary depending on the type of business (whether self-employed or company).
The Accountancy Services You May Need
Other than tax obligations, your travel company will also need to consider hiring an accountant for additional accounting services. Your needs will largely depend on the type of business. For example, if you are self-employed you may be better off with simple, book-keeping services. But if you are a company you may want to consider a full accounting service package that includes preparation of annual reports, payroll and bookkeeping. Here is a list showing accounting services that a typical travel company should have as well as optional add-ons:
– Must-have accounting services
– Management of bank account
– Register your Limited company
– Submit tax returns
– Prepare payrolls and payslips
– Do monthly book-keeping
– Prepare financial statements
Optional services (depend on your company’s size and needs)
– Prepare quarterly and semi-annual reports
– Do internal audits
– Prepare paperwork for division of dividends (if applicable)
– Submit annual returns to HMRC
– Liaise with other service providers (like insurers and banks)
Choosing the Best Travel Industry Accountant in London
Knowing what to expect from your accountant is good, but choosing the best accountant is even better. Having the best accountant will lead to financial efficiency and business growth. With so many accountants for travel agents based in London, how do you go about choosing the right one for your business?
- Choose a certifiedaccountant. Do not shy away from asking them to show you their certification. Makesure they are a Certified Public Accountant (CPA), Chartered Accountant and/or AAT Licensed Accountant based on UK accreditation.
- A good working experience in the travel industry should be a priority. Being an accountant doesn’t necessarily mean they will help you in your industry. Look at some of their current clients. Are they in the travel industry? Are they based in London?
- Affordability is also key.
- Only settle for transparent accountants. If they can’t discuss fees and charges explicitly there is every chance they lack transparency and integrity.
- The more the services theyoffer the better they are. There are many accounting services (as mentionedalready). Your business will be better off if your accountant can do as many of those as possible.
More Considerations When Choosing an Online Accountant
Add these considerations if you are hiring an online accountant:
- Check their reviews to seewhat other clients are saying. If they are rated highly then they offer goodservices.
- Where are they located?Location does matter even if they are based online. You should be able to getto their workplace whenever the situation calls for it. So it is better to stick to London-based accountants, preferably those within the same business district as you.
- Ask advice from your socialcircles. One or few people might know a reliable online accountant for travelagents.
With that summarised guide, you are in capable hands with GM professional accountants for your travel agent. Remember, with a good accountant your business will grow.Contact us now