When should I hire an ACCOUNTANT?

When should I hire an ACCOUNTANT?

Each stage of your business will provide a forecast or glimpse of what the other stage will entail. Thus, at each stage it will ultimately demand you to have an even greater level of consistency and organization within the aspects or fields of recording, filing your taxes, or being compliant with the bank. It has been observed, especially within the early stages of business, that many entrepreneurs sometimes believe that they are able to handle these tasks on their own. They even think that it’s just easier, or should I say cheaper, to even visit the Tax Office on or before March 15th to let a Compliance Officer assist with the filing of their taxes. This, therefore, raises the notion to many entrepreneurs or even individuals; ‘Is the need for an Accountant really important?’. Yes, though you are able to visit the Tax Administration to have it done for free, how can all this be done without any proper knowledge or records?

An overview of what Business really entails 

Whether it comes to filing your taxes, managing your books, trying to obtain a TCC, trying to get a business Credit Card, or even trying to access a Business Loan; All of these tasks will require a great deal of knowledge and will to understand. And also, the extent to which all of these are interconnected CANNOT be taken for granted. Let’s take you on a journey of trying to get a business bank account. After you have started the process, you’ll realize that in order to do so, you will first need a TCC & a Cash Flow Projection. Upon trying to obtain the TCC you will be asked about your current tax filing and payment status by a compliance officer at the NHT, NIS, and then at the Tax Administration Jamaica. This is therefore connected with the aspect of you having to ensure that your records are up to date properly enough to submit your figures on an SO4, ITO2 or ITO3, or IT12 (Depending on your business type) to do your tax filing. So, you see all the aspects are intertwined. This said TCC is also required for a number of other purposes such as but not limited to access to a Credit Card, clearance purposes or even gaining access to a Business Loan. All of which will constantly be avenues to consider right through your financial journey as an entrepreneur. This is even more crucial to take into consideration in order to maximize constant growth and increase revenue, which will ultimately increase your workload. Hence, the real question to now ask yourself is; ‘Will I have the required time and energy to remember to do these things?’ 

What ROLE does an Accountant play in your business growth? 

Ultimately, the role of an Accountant is to assess and aid in the process of maintaining a fair and true representation of your business transactions and subsequently preparing your records (Financial Statements and Tax Filing) using and ensuring that the financial and accounting principles are carried out properly. Some of these principles include: 

1. Advise the entrepreneur of the necessary factors that must be implemented to record their daily business transactions. 

2. Advise the entrepreneur or client on the necessary tax filing process required to ensure that their business stays compliant with the Tax Office. 

3. Prompt the entrepreneur on what it takes to ensure that they are on the right path to gain or access credit or loan facilities from the bank.

4. What should be implemented in the event the entrepreneur or business is selected at random for an audit.

5. Assisting the client with gaining access to other needed government requirements or certifications in order to ensure that their businesses are fully compliant within their respective fields. 

As shown above, within all those necessities, requirements, or principles listed about the importance of roles of an Accountant, will come other connected intricacies. These intricacies are often ignored by most entrepreneurs either because of a lack of knowledge or simply not having sufficient time to attend to these things. Hence, this is when an entrepreneur or in Jamaican layman’s terms ‘businesspeople’ become enlightened by these intricacies. And yes, this usually confirms to them ‘why having an Accountant close to their side is always extremely important.

If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:

  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
  6. TCC Services

And Others.

Like us on:

Written by: Kmar Henry [ CEO |BIZcare Consultation & Accounting Firm Limited ]

Edited by: Sheryl Bailey [ Director | BIZcare Consultation & Accounting Firm Limited ]

What to do after filing YOUR Taxes?

What to do after filing YOUR Taxes?

After filing your taxes, there’s a list of things that you must do in order to ensure that you stay compliant or meet the obligations of the Tax Administration. As we have seen so many times where taxpayers become so distracted with doing business that they forget to ensure that these obligations are met. As such, here are some of these obligations: 

1. Not remembering to submit their return in order to pay their Trade License: This is probably the most common, as many times taxpayers within the retail and wholesale industry forget that their trade license fee is tied or based on how much revenue was made within the year before. Thus, this simply means that your amount to be paid is basically a reflection of your sales or revenue for the prior year. This submission and payment become due on April 1st of each year.

2. Not paying or covering Quarterly Tax Payments: This is also another common factor, as many taxpayers or business owners simply just don’t remember this obligation until they become in need of a Tax Compliance Certificate. As such, your Quarterly Tax Payments should be made on the following dates: March 15th, June 15th, Sept 15th, and Dec 15th. Also, it is important to note that if you’re trying to retrieve your NHT qualification at a later date, you must ensure that your quarterly payments for NHT are made on time. 

3. Not registering for a GCT account after filing and realizing that they are over the $10M GCT Threshold: Many taxpayers or business operators (Wholesalers and Retailers) are guilty of this as they just think that it’s better to ignore the factor until they are promoted or visited by a compliance officer. It should be noted that once you are over the GCT threshold, you should ensure that you open a GCT Account and commence the submission of a Form 4A Return monthly via the TAJ online portal. 

4. Not Filing and Paying their SO1 Return: This is another factor that is just knowingly ignored by most taxpayers until they are either again prompted by the Tax office or in need of a Tax Compliance Certificate (TCC). As such, please bear in mind that your SO1 Returns must be submitted and paid on or before the 14th of each month. Failure to do so will only attract interest to your principal to paid already to be paid.

5. You should continue to File your Invoices and Receipts PROPERLY: Many taxpayers and business owners are guilty of this, as they are still carrying a box filled with receipts and invoices at the end of the year to their accountants. Please do remember that you should always try to implement a proper recording system that persists to ‘properly file’ and put away your invoices and receipts from your business transactions based on categories in chronological order or format. 

NB. It is never in your best interest to ignore these obligations until you are in need of a TCC or waiting to be visited by a compliance officer. By then you might be liable to pay taxes for months or years that have already passed which will ultimately lead to you paying lump sums in taxes, rather than being compliant from the get-go.

So, there you have it. Let’s ensure that we try our ultimate best to try not to commit these common mistakes as their recurrence will only make you continue to meet or pay your obligations in a larger sum of money that you simply might just not have at the time.

If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:

  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
  6. TCC Services

And Others.

Like us on:

Written by: Kmar Henry [ CEO |BIZcare Consultation & Accounting Firm Limited ]

Edited by: Sheryl Bailey [ Director | BIZcare Consultation & Accounting Firm Limited ]

The Dos and Don’ts of Recording your Business Transactions

The Dos and Don’ts of Recording your Business Transactions

Over the years, we have seen a growing need to always prompt entrepreneurs or individuals on the importance of recording their business transactions properly. This often entails or involves the entrepreneur must ensure that some type of recording system is implemented. As such, this can be done whether manually or electronically depending on the size of the business. Thus, again, we have seen the need to outline some pointers that must be practiced when carrying out or recording these business transactions:

1. All sales transactions must be done in sequence and properly dated: The importance of this is always outlined by auditors as they will let you know point blank that if you don’t have a ‘numbered sequence’ which is attached to a date to properly trace or track your sale transactions, they will have to use other means of verifying your sales. 

2. All customers must be handed a receipt: It may seem simple, but a lot of entrepreneurs are still making or guilty of this minor error as they just sometimes don’t have the time or more simply put; just can’t remember to issue a receipt. Especially when it comes to cross banks transactions. Please remember that your customers must be given a receipt that clearly shows the price charged, the date, and a receipt number, and even more so if you are deemed obligated to charge GCT. 

3. All purchases or expenses must be recorded based on categories: When recording and storing your purchases or expenses, this should be done by placing all receipts or invoices within the right category or line item. For e.g.: a gas receipt should be stored in the line item of Traveling/Transportation and not with Utilities. This should be done in chronological order with its respective dates. 

4. All purchase, expense receipts, or invoices by law must be kept for a minimum of seven (7) years: It is just that plain and simple. However, to be on the safe side we recommend that you even keep them for at least ten (10) years in the event you might need to rectify something with the Tax Office after an audit. 

5. Ensure to photocopy your purchases, expenses receipts, or invoices if you see that they are fading away: This is a common problem that is faced when storing receipts. As such, it is highly recommended that you store a copy and staple the original copy if you see that this problem persists. 

6. Please don’t throw away your receipts or invoices: Yes, we have seen the importance to ensure that we AGAIN make this KNOWN. Please keep all invoices safe for a minimum over a seven (7) year period. 

7. Ensure to update your cheque stubs correctly with the necessary transaction details: Many entrepreneurs fall guilty with this pointer. As they simply just don’t remember to update their cheque stubs with the necessary transaction details. This is a pointer that may be a lifesaver within an audit process, as auditors can use these details to confirm expenses that were absorbed. 

8. Be sure to capture Petty cash transactions: Whether it is paying someone to do some landscaping, buying gas to do delivery, or just paying someone to do some cleaning. Please ensure to have some type of petty cash system implemented to capture these transactions. What happens most times is that these miscellaneous expenses usually add up to be a hefty figure after the completion of the year and are easily overlooked because there is no trace of these transactions. 

9. Keep an accurate and updated record of your Receivables and Payables: This information is always important, especially when it comes to compiling your financial statements for a loan or to gain access to a Credit Card. Please ensure to have these figures properly documented based on payments received from customers or payments made to suppliers. 

10. Record all Asset purchases: Entrepreneurs tend to downplay the importance of this aspect, due to the fact that they are not knowledgeable of the capital allowances that can be claimed from the value of these assets. Thus, we strongly recommend that you implement a fixed assets register to show all these details. This register should include the type of asset, the date bought, and the value of the asset at the time of the purchase.

*It is strongly recommended to install electronic software to do your recordings. What you’ll realize is that it might be easier to capture these extremely important aspects as well as run reports per month to see the financial position of your business at any given point*. Especially when it comes to other things like inventory monitoring and stock count. You’ll definitely need to have some form of a reliable source to pull from to check these figures. With the added notion that you are obligated to do this according to the ‘taxation act’ which could see you being fined of up to $2M if you are deemed guilty of this breach after an audit is conducted.

If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:

  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
  6. TCC Services

And Others.

Like us on:

Written by: Kmar Henry [ CEO |BIZcare Consultation & Accounting Firm Limited ]

Edited by: Sheryl Bailey [ Director | BIZcare Consultation & Accounting Firm Limited ]

TAX MEASURES that you MUST know before starting your Small Business in Jamaica

TAX MEASURES that you MUST know before starting your Small Business in Jamaica

By: Kmar Henry

       CEO │ BIZcare Consultation & Accounting Firm Limited

Date: January 6, 2022

Let’s remove the fear for a while and let’s think about the ‘know how’ we need to ensure that we won’t be nervous if that tax compliance officer happens to pull up at our business locations. It is a fact that our Government has NOW implemented rather harsh penalties due to the high number of taxpayers and business owners who have not been complying with the necessary tax measures. Hence, filing late will now attract a late fee of $5,000.00 per month. So, let’s do a rough estimate in our heads; ‘let’s say that we are one year late, right, that would actually amount to $5000.00 x 12 months = $60,000.00?’ Yes! You are very much correct, so let us look at the tax measures that we must comply with before we even think about starting a business.

1. SO4/ITO2/ITO3 Filing: Each is dependent on the type of business that you choose to start, so let us look at each separately:

           a. SO4: This is required or used by persons who start a sole trader otherwise called a 

                        Trade As (T/A) which is accompanied by a Business Name. It is important to note that

                        with this business type, as a taxpayer, you still benefit from the Income Tax 

                        The threshold is now at $1,500,096.00 effective April 1, 2018.

           b. ITO2: This is used by persons who choose to start a Limited Liability Company. 

                             With this type as a company, you are not entitled to receive the Tax Threshold 

benefit, however, there is a new Income Tax Credit of $375,000.00 since 2021 for MSMEs whose annual revenue does not exceed JMD 500M. It is imperative to also note that shareholders are required to file their annual taxes individually.

          c. ITO3: This is required by entities who choose to operate as a partnership, which is one of the most preferential types of business at first instance. It should be noted that both the aspect of profit being shared and the Tax Threshold are considered. Hence, only profits are declared and then taxes are filed individually for each partner based on how profit is shared.

It is also important to note that all filing methods require the filing of an estimate of the preceding year based on what was filed for the prior year.  

2. GCT Filing: Perhaps one of the most misunderstood taxes among the Small Business community. Let me first establish that only persons or small businesses earning revenues over $10,000,000.00 are required to file, collect or turn over the ‘GCT portion back to the government.’ Thus, if you are below you are NOT required to file in this respect, Except for Car Dealerships who are required to register regardless of the threshold. However, for those who are over this threshold you are required to file a 4A form MONTHLY; of which you are required to turn over the portion left when you subtract your sales from your purchases. Remember the GCT portion is calculated after you have attached your mark upon your ‘UNIT COST.’ So, you are only turning over that amount and not your ‘PROFIT.’ Furthermore, it is important to remember that you will certainly end up with a credit amount in some months based on the purchasing nature of your business.

3. SO1 & SO2 Filing: In the real world, most businesses are avoiding this tax measure by going the contract route within the aspect of employment. Thus, employees are obligated to pay their own taxes for the period employed. And although this is not legal, employers are able to get away with this because of the desperate need for jobs. However, if you are taking into consideration the welfare of your employees, you are required to collect, file, and pay over their taxes monthly via the use of an SO1 Form based on their wages which should be over the minimum wage of $7,000.00 weekly or $28,000.00 monthly. You are then required to file over the total sum based on their salary throughout the year via the usage of an SO2 Form. You can visit the JamaicaTax.com website for more information on the rate of each tax portion based on employee and employer amounts.

It is important to note that there are other obligations that include your trade & business license, business registration, and property tax payments if you are operating at your own building. It is encouraged to know and understand the five (5) named tax measures as these will prove pivotal towards the long-term survival and running of your Small Business. It is extremely important for us as Small Business owners to stay informed and knowledgeable of changes when they are implemented by our government. Thus, a good relationship with your compliance officer or tax accountant is essential.

If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:

  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
  6. TCC Services

And Others.

Like us on:

Written by: Kmar Henry [ CEO | BIZcare Consultation & Accounting Firm Limited ]

Edited by: Anothonio James [ CEO | I Am Skilled ] and

Sheryl Bailey [Director | BIZcare Consultation & Accounting Firm Limited ]

THE TYPICAL BUSINESS PROCESS (Understanding the Steps To Take After Registration)

THE TYPICAL BUSINESS PROCESS (Understanding the Steps To Take After Registration)

Typically, after conceptualizing a business idea, it is important to stay in line with much-needed expertise on the next steps to follow after registering your business. Hence, below I have set out Six (6) essential steps that every business person must follow in order to operate a successful business. Thus, here goes:

Step 1: Consultation Process

Consult with an accountant, experienced business person, or education officer at the tax office about what you want to do in order to get a firm understanding of the process and what it entails. This will save you money and time. Especially within the aspect of recording keeping, GCT Filing, and predominantly Tax Filing.

Step 2: Registration Process

You will then need to register your business at the Companies Office of Jamaica. Forms used are varied via business type. Hence, it’s important to know which type you are registering as before you start. Also, in order to know the attached prices.

3. Open a Bank Account:

You will then need to use your Business Certificate along with a TCC and Projection to open a business account at whichever bank that you choose. The TCC process involves you getting clearances from the NIS, NHT and then proceeding to the Tax Office for your TCC. 

4. Implementing a proper Recording System:

Recording systems will be a cohesive effort by you and your team to capture all invoices which will include revenues, purchases, and expenses of the business. There is much software that can do these things. Hence, please do some research as this part is extremely detrimental towards you accessing a loan or financial help further down the line.

5. Filing your Taxes: 

Probably the most disregarded process of them all, as most business persons are still somehow scared of the notion or aspect of ‘taxes’. Hence, they have always seemed to delay in attending towards the tax’s aspect of their businesses which then prove to be or form a major haul. Thus, ensuring that you maintain a tightly gripped compliance officer at the tax office or an accountant is extremely important as you might be required to do not only yearly filing, but also monthly.

6. Getting a Loan: 

At this time, you’ll understand why it’s important to do the things before as they are all correlated. Thus, you will see at this point how much you have stipulated an easier approach you to get a loan as this will include a full assessment and gathering of as explained.

These steps have proven to form a thin line between us as business persons towards staying compliant with the regulations of government authorities. Thus, continuous learning and adaptation will also be highly essential as there might be changes in the future. However, these are the typical process that all potential business persons must follow. 

If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:

  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
  6. TCC Services

And Others.

Like us on: