Introduction:
VAT might not be the most exciting part of running a business, but it’s one of the most important. With multiple VAT schemes, ever-changing rules, and strict deadlines, it’s easy to feel overwhelmed. Whether you’re just getting started or have been trading for years, getting your VAT returns wrong can lead to penalties and lost time. But with the right support, it doesn’t have to be that way.

Why This Matters:
VAT compliance isn’t just about ticking HMRC’s boxes – it directly affects your cash flow and peace of mind. Submitting your returns accurately and on time means no nasty surprises, no chasing receipts, and no wasting hours trying to figure it out yourself. At Love Accountancy, we make it effortless by combining technology and expert support so you can focus on running your business, not wrestling with VAT.

The Solution: How We Make VAT Easy
Here’s how we take the stress out of VAT returns for businesses across Exeter and the UK:

1. We Handle It for You
We prepare and file your VAT returns accurately and on time, ensuring you remain fully compliant with HMRC requirements. No more last-minute scrambles.

2. We Help You Choose the Right Scheme
From the standard VAT scheme to Flat Rate or Cash Accounting, we help you choose (and review) the best option for your business so you don’t pay more than you need to.

3. We Use Smart Software Like Xero
Our seamless Xero integration makes record-keeping simple and VAT calculations automatic – saving you hours every quarter.

4. We Keep You Updated
VAT rules can change. We stay on top of the latest regulations so you don’t have to, helping you stay compliant and avoid penalties.

5. We’re Always Here to Help
Got a question about a transaction or unsure if something is VATable? We’re just a call or message away with clear, friendly advice.

Expert Tips & Common Pitfalls

• Don’t Wait Until the Deadline: Give yourself (and us) plenty of time to gather and check your records.

• Track VAT on All Invoices and Purchases: Missing small receipts can add up fast – use Xero’s mobile app to capture them in real time.

• Not All Incomes Are VATable: If you sell exempt or zero-rated goods or services, you could be missing important nuances. Ask us if you’re not sure.

• Review Your VAT Scheme Regularly: What worked last year might not be the best fit now – especially if your business is growing.

Call to Action:
VAT doesn’t have to be confusing or time-consuming. If you’re tired of the stress and want VAT sorted properly – every quarter, without the hassle – get in touch with Love Accountancy today. We’ll make sure everything runs smoothly, so you can focus on what you do best.

About Love Accountancy:
Love Accountancy helps businesses across Exeter and the UK simplify their finances through expert, technology-driven support. Whether it’s submitting VAT returns, staying compliant with HMRC, or optimising your systems with Xero, we make accounting easy and stress-free. If you’re looking for a reliable, proactive Exeter accountant to handle your VAT returns, we’re here to help you grow.

Making Tax Digital: What It Means for Your Business

Staying ahead of tax changes is easier when your accountant is ready by design.

At Love Accountancy, we have been MTD-ready from the start, meaning our clients can move confidently into the future of digital tax compliance without extra hassle, stress, or hidden costs. If you are wondering what Making Tax Digital (MTD) means for your business and how to prepare, you are in the right place.

Why This Matters

Keeping on top of tax deadlines and compliance requirements can be time-consuming, especially when HMRC rules keep changing. MTD is not just about ticking a box; it is about making your financial processes more efficient, saving you time, and reducing the risk of errors. Businesses that embrace digital tools like Xero not only stay compliant but also benefit from real-time visibility of their finances.

At Love Accountancy, MTD is built into how we work, helping you focus on growing your business – not grappling with spreadsheets.

The Solution: What You Need to Know About Making Tax Digital

Step 1: Understand What MTD Covers

MTD is being rolled out in phases:

• VAT: Since April 2019, VAT-registered businesses with taxable turnover above £85,000 have been required to comply with MTD. From April 2022, this extended to all VAT-registered businesses, regardless of turnover.

• Income Tax Self Assessment (ITSA): MTD for ITSA will become mandatory in phases:

  • From 6 April 2026, for individuals with income over £50,000 from self-employment or property.

  • From 6 April 2027, for those with income over £30,000.

  • From 6 April 2028, for those with income over £20,000.

• Corporation Tax: MTD for Corporation Tax is not expected before April 2026, with a voluntary pilot anticipated prior to it’s compulsory.

Step 2: Choose MTD-Compliant Software

If you are already using Xero, great news – you are already set for MTD, you just might need to tweak some of your processes. If not, we make switching effortless with cloud-based onboarding that gets you running quickly and smoothly.

Step 3: Set Up Digital Record Keeping

Gone are the days of paper receipts and manual spreadsheets. MTD requires maintaining accurate, real-time financial records electronically.

Step 4: Submit Your Returns Digitally

MTD returns are filed directly through your software to HMRC. No more manually entering figures or worrying about transcription errors.

Step 5: Partner with an MTD-Ready Accountant

Love Accountancy integrates MTD compliance into every part of our service. We make sure your systems are not just compliant, but working for you – giving you peace of mind and more time to focus on what matters most.

Expert Tips and Common Pitfalls

Expert Tip:
Start early. Even if MTD deadlines for income tax or corporation tax feel far away, the sooner you set up good digital habits, the smoother your transition will be.

Common Pitfall:
Leaving MTD compliance to the last minute can lead to rushed setups, missed deadlines, and unnecessary penalties. If your accountant has not yet mentioned MTD – or seems unsure about the process – it might be time for a change.

At Love Accountancy, we were built with MTD in mind. It is not an afterthought; it is how we help make accounting effortless for you.

Call to Action

Ready to make tax digital the easy way?
At Love Accountancy, we make MTD compliance seamless. Book a free call today and find out how effortless accounting can be when you have the right partner by your side.

About Love Accountancy

Based in Exeter, Love Accountancy provides expert, technology-driven accounting services to small and medium-sized businesses across Devon and beyond. Whether you need help with Making Tax Digital, Xero onboarding, or strategic financial advice, we are ready to help you grow. Love Accountancy | Accountants that care

The Biggest Cash Flow Mistakes SMEs Make (and How to Fix Them)

Cash flow is the lifeblood of any business, but for many small businesses, it’s one of the hardest things to get right. You can be profitable on paper and still run into serious financial trouble if money isn’t flowing in and out at the right time. The good news? Most cash flow issues are completely avoidable with the right systems and habits in place.

Let’s take a look at the biggest cash flow mistakes we see, and how to fix them before they cause real stress.

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Why This Matters

When cash flow goes wrong, it doesn’t just cause short-term stress, it can hold back your growth, damage your relationships with suppliers, and even put your business at risk. By addressing these common pitfalls, you can free up headspace, build financial confidence, and focus on growing your business with clarity.

At Love Accountancy, we help SMEs take control of their cash with smart tools like our Cash Management System and Xero integrations, so money flows in the right direction, with no nasty surprises.

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The 5 Most Common Cash Flow Mistakes (and Simple Fixes)

1. Not Putting Aside Money for Tax

One of the biggest causes of panic? Realising your corporation tax or VAT bill is due and the money isn’t there.

Fix:

Use a simple system to set aside a percentage of income for tax each time you get paid. We recommend setting up a separate “Tax Pot” bank account so it’s out of sight, out of mind (until you need it). Our Cash Management System manages this, making it effortless to stay ahead of every bill.

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2. Overlooking Payroll Planning

Wages, pensions, bonuses, it all adds up. Missing payroll isn’t just a cash flow issue; it hits staff morale hard.

Fix:

Forecast payroll well in advance, not just monthly but quarterly. If you have seasonal fluctuations, plan for quieter months by smoothing out salary commitments or adjusting your pay cycles. Use software like Xero to schedule, track and plan payments. Love Accountancy can also manage the payroll for you.

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3. Confusing Profit with Cash

Just because your profit and loss report shows a gain doesn’t mean you have money in the bank. If your customers haven’t paid you yet, your “profit” is just numbers on a page.

Fix:

Use cash flow forecasting tools to map out what’s coming in and going out. Xero’s built-in cash flow view, or our CMS approach, gives real-time insight into what’s actually available to spend today, not just in theory.

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4. No System for Managing Cash

Trying to make financial decisions without a plan is like flying blind. Too often, we see SMEs reacting to cash shortages instead of proactively managing them.

Fix:

Adopt a clear, simple cash management system. At Love Accountancy, we help businesses assign every pound a role, whether it’s for payroll, suppliers, VAT or owner pay. This makes decision-making easier and helps avoid overspending. If you’ve not read it yet, we recommend reading “Profit First” by Mike Michalowicz.

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5. Letting Late Payments Slide

Waiting too long to chase unpaid invoices can quietly ruin your cash position. It’s not about being pushy, it’s about being consistent.

Fix:

Set clear payment terms, automate reminders, and follow up quickly. Better yet, use software that flags late payments and lets you send nudges without lifting a finger. Xero’s invoice tracking makes this easy and we can help you set it up properly.

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Expert Tips & Common Pitfalls

• Tip: Use multiple bank accounts to separate funds: one for operating expenses, one for tax, one for savings. This gives clarity and control. Or better yet use a bank like Monzo or Starling, where you can set up saving pots all within one bank account.

• Tip: Review your cash flow weekly, not monthly. It doesn’t have to take long, just 10 minutes with the right dashboard or system.

• Common Pitfall: Relying on personal credit cards or loans to plug gaps. It might help short term, but it’s not a sustainable solution.

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Call to Action

Worried about your cash flow? Let’s take the stress out of it. Our Cash Management System gives you a clear plan for every penny, so you always know what’s available, what’s safe to spend, and what needs setting aside.

Book a quick call with the team at Love Accountancy today, and let’s get your cash flow working for you, not against you.

https://www.loveaccountancy.co.uk/contact/

About Love Accountancy

At Love Accountancy, we believe great cash flow is the foundation of business success. Based in Exeter, we provide expert, technology-driven accounting services to small and medium-sized businesses across Devon and beyond. Whether you need support managing your cash flow, setting up a Cash Management System, or getting the most from Xero’s real-time insights, we are here to make your finances simpler, smarter, and stress-free – so you can focus on growing your business. Love Accountancy | Accountants that care

How to Take the Stress Out of Tax Returns: A Step-by-Step Guide

Introduction: Tax Returns Don’t Have to Be Stressful

Tax return season often brings a wave of stress for business owners and self-employed professionals. The fear of getting something wrong, missing deadlines, or paying more tax than necessary can make it a daunting task. But here’s the good news, filing your tax return doesn’t have to be a last-minute panic. With the right approach, tools, and a little forward planning, you can make tax season smooth, stress-free, and even beneficial for your business.

At Love Accountancy, we believe in making accounting effortless. In this guide, we’ll walk you through a step-by-step approach to taking control of your tax return, avoiding common mistakes, and, most importantly, reducing stress.

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Why This Matters

A well-prepared tax return isn’t just about ticking a box for HMRC, it’s an opportunity to:

• Avoid penalties and unnecessary stress.
• Ensure you claim all allowable expenses, potentially reducing your tax bill.
• Keep your financial records organised, making business planning easier.
• Save valuable time that you can reinvest into growing your business.

By following these simple steps, you can file your return with confidence and even put systems in place to make next year’s process even easier.

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Step-by-Step Guide to a Stress-Free Tax Return

1. Get Organised Early: Don’t Leave It to the Last Minute

The biggest mistake business owners make? Procrastination. Leaving your tax return to the last minute only increases stress and the risk of errors.

Action: Set a reminder well before the deadline (31 January for self-assessment). Block out time in your calendar to review your finances.

Tip: If you work with an accountant, send them your records as early as possible, don’t wait until the Christmas rush!

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2. Gather All Your Financial Records

To complete your tax return accurately, you’ll need:

• Bank statements and business income records.
• Invoices issued to clients/customers.
• Expense receipts and records of what you’ve spent on your business.
• Payroll records (if applicable).
• P60/P45 forms (if you have employment income as well).

Action: Use a cloud accounting tool like Xero to keep all your records in one place throughout the year. This saves you from scrambling for paperwork in January.

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3. Know What You Can (and Can’t) Claim as Expenses

Many business owners overpay tax simply because they don’t claim all their allowable expenses. On the flip side, claiming ineligible expenses can land you in trouble with HMRC.

Common Allowable Expenses:

• Office costs (rent, utilities, internet).
• Travel and mileage (for business purposes).
• Equipment, software, and subscriptions.
• Marketing and advertising costs.
• Professional fees (e.g., accountants, solicitors).

Common Mistakes to Avoid:

• Personal expenses: if it’s not solely for business, it may not be deductible.
• Overclaiming for meals or travel: keep detailed records.
• Forgetting home office expenses: if you work from home, you may be eligible to claim a portion of your household bills.

Action: Keep a digital record of expenses with receipts attached, this makes tax time so much easier.

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4. Don’t Guess, Ask for Help

Tax rules can be complex, and HMRC isn’t always the easiest to navigate. If you’re unsure about something, don’t guess, seek professional advice.

Action: Reach out to an accountant early if you need help. A good accountant can save you time, stress, and even money by ensuring you claim everything you’re entitled to.

Pro Tip: Consider tax investigation insurance: this protects you in case HMRC ever decides to audit your return.

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5. Submit and Pay on Time

Missing the 31 January self-assessment deadline results in an automatic £100 fine, with further penalties for late payments. Even if you can’t pay your tax bill in full, submit your return on time to avoid penalties.

Action: Once you’ve checked everything, file your tax return via HMRC’s online portal or through your accountant.

Pro Tip: If your tax bill is higher than expected, you may be able to arrange a payment plan with HMRC to spread the cost.

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Expert Tips & Common Pitfalls

Make Next Year Even Easier

• Set up a tax savings pot: regularly set aside a percentage of your income for tax to avoid cash flow surprises.
• Keep good notes on calculations and decisions: it makes answering HMRC queries (and next year’s return) a breeze.
• Automate your bookkeeping with Xero: this keeps your records up to date all year, so tax season is just another day.

Common Pitfalls to Avoid

• Ignoring letters from HMRC: even if you think they’re not relevant, check them carefully.
• Forgetting payments on account: if your tax bill is over £1,000, you may need to make advance payments for next year.
• Assuming all accountants are the same: a good accountant will not just file your tax return, but help you plan and optimise your finances.

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Final Step: Take the Stress Out of Tax with Expert Support

Still dreading your tax return? Don’t go it alone. Love Accountancy can take care of it for you, so you can focus on running your business. We handle everything from record-keeping to tax efficiency planning, ensuring your return is accurate, compliant, and stress-free.

Book a free consultation today and let’s get your tax return sorted, without the last-minute panic: Get in touch

About Love Accountancy

At Love Accountancy, we make tax returns simple, stress-free, and easy to manage. Based in Exeter, we support small and medium-sized businesses across Devon and beyond with expert, technology-driven accounting services. Whether you need help filing your tax return, staying compliant with HMRC, or planning ahead for next year, we are here to save you time, reduce stress, and help you stay in control of your finances. Love Accountancy | Accountants that care

VAT and VAT registration

These videos will help you understand a VAT registration and how to do your book keeping once you are VAT registered:

Understanding the implications of being VAT registered:

• Create a sales invoice for any sales or work you do
• Watch: this video takes you through the process of creating a sales invoice in Xero: https://www.loom.com/share/9df8d9e99de743209fc266a39adf5516
• Read: http://www.loveaccountancy.co.uk/how-to-create-a-sales-invoice-in-xero/ for guidance on how to create an invoice – this is a useful guide when used in conjunction with the video above

• Process any purchase invoices or receipts as bills – this is a similar process to raising sales invoices. Remember you can attached scanned copies of any invoices or receipts received – we recommend doing this for ease of review and as evidence
• Watch: https://www.loom.com/share/9227978d4ea24adfb7e0c6ae4e622587 – this video takes you through the process of inputting a purchase invoice into Xero.
• Read: http://www.loveaccountancy.co.uk/how-to-process-a-purchase-invoices-bill-into-xero/ on how to process bills (this is a good summary guide to reference after watching the video above.
• If you have expenses that you paid for out of your own pocket (cash or personal bank account), mark these bills off as paid to the “Director’s Loan Account” if you are trading as a Limited Company or the “Capital Introduced” account if you are trading as a sole trader or partnership.

• Match bank receipts and payments with sales invoices and purchase bills. Create new transactions/transfers if necessary.
• See http://www.loveaccountancy.co.uk/how-to-reconcile-the-bank-in-xero/ on how to reconcile the bank
• If you’ve bought something using the business money that is personal in nature, you can reconcile this to the “Director’s Loan Account” if you are trading as a Limited Company or the “Drawings” account if you are trading as a sole trader or partnership.

Things to think about before your year end…  These may help reduce tax 

The best thing you can do is book a meeting with us as early as possible before your year end: chat.loveaccountancy.co.uk

• Making a larger pension contribution
  • Paying into a company pension is a tax efficient way of putting money away for your future. The true cost to putting £10,000 into a pension is currently £8,100. 
• Buy any large assets before year end
• Have all director expenses/mileage been put through Xero
• Do the statement balances on the bank accounts on Xero match your bank balances?
• Review salaries and bonuses – year end is a good time to declare bonuses to help reduce tax bills 
• Consider R&D – have you taken on any eligible research and development projects in the year that could receive accelerated tax relief. 
• Ensure your sales ledger is up to date and overdue invoices are chased. Love Accountancy can help you with this if necessary. 

Help us to help you

• Help us get your accounts completed earlier by making sure Xero is as up to date as possible now, rather than later… 

Smaller considerations: 

• Staff events – each year a company can pay for annual staff events up to £150 (including VAT) per guest which is allowable for Corporation Tax relief. The rules are that all members of the company must be invited and a spouse or partner can attend provided the cost for the couple does not exceed £300 (including VAT). It will be tax free provided the limit is not exceeded, if it does the whole cost is taxable, not just the excess. This is not an allowance, you must include the actual cost of the event and have receipts to support this.
• Stock up on office supplies – for example printer cartridges, paper, stationery or other general office supplies.
• Consider trivial benefits for employees and directors – £50 limit : https://www.gov.uk/expenses-and-benefits-trivial-benefits – remember these must not be a “reward” or be considered contractual in nature

Things for Love Accountancy to consider:  [LINK TO INTERNAL HUB]

Updating bank feeds every 90 days

Please log into Xero and renew any bank feeds you have set up. You should see the option to update the feed on any accounts that need it. 

Please note, if you use Starling bank, you’ll need to update the bank feed in the Starling App, not in Xero! 

Why do I need to do this? 

As part of new rules around open banking, you will have to log into Xero and update your bank feeds every 90 days. Depending on the bank you use, you may get a reminder to do this (Starling for example will notify you in App, which is where you can make the update). 

If we spot that you need to update your feeds, we’ll notify you by SMS (text message). Please act on this quickly. 

If you don’t update the feed before the feed is severed, then bank transactions will be missed and this can cause issues further down the line, with missed transactions and or the need to request bank statements for the whole year. 

 

Here is the text from Xero about why you need to renew every 90 days: 

Authenticating your bank feed

When you connect a new bank feed or change your existing bank feed connection, as part of the new requirements, your consent will last for 90 days. After 90 days, you’ll need to re-authenticate your bank connection. Xero will remind you when you need to do this – it’s as simple as re-entering your online banking credentials. Whilst it’s a little extra admin, this is a new standard under Open Banking.

If you don’t re-authenticate my bank feed after 90 days, you can re-authenticate your bank feed at a later date. You’ll just need to make sure you import historical transactions back to the date your bank feed stopped importing transactions so there isn’t a gap. You can only import 90 days of historical transactions when re-authenticating your bank feed. If you need more historic data you’ll need to manually import transactions into Xero.

If you’re thinking about making R&D tax credit claims, here’s what you need to know about the process. (more…)