Commonly asked accounting questions

Most self-employed workers won’t know the answer to every accounting question they have for their accounting and finances. How handy would it be to have your own dedicated accountant to ask any questions, whenever you need it. You’d get all your accounting completed without waiting for days on that email back from your accountancy firm.

At Crunch, we want to make handling your accounting and finances as easy as possible. Which is why we have put together this article of our ACCA qualified accountants' most common questions from our clients, so you can get the answer you’ve been looking for right away.

When will I get my VAT number?

Usually your VAT number takes around 2 - 4 weeks from the date we register you to come through via HMRCs online portal, however, sometimes HMRC may want to get a bit more information on your trading activity. In the event of this, it may mean that your VAT registration number can take a little longer, but don't worry, our team of accountants can give you advice on what steps to take when invoicing your client's in the meantime.

When can I take a dividend?

Dividends are a distribution of profit, therefore, you can take a dividend when there’s sufficient profit made (or retained profit brought forward from previous years).

What expenses can I claim?

There is a large list of expenses that you can claim for your business. This can range from travel/transport, any tools or equipment necessary to complete your work, and legal fees if related to your business, to name a few examples.

To get the full list of expenses you can claim for your business, check out our business expense guide.

What is the 24 month rule with regards to travel expenses?

You can claim for travel to a temporary workplace, but not a permanent one. If you work at the same place for more than 24 months, and more than 40% of your working time, then it’s considered a permanent workplace.

When do I need to do a Self Assessment?

Self Assessments can be completed once the tax year has ended on the 5th of April. They need to be filed with HMRC by the following 31st of January for online returns, or by the earlier deadline of the 31st of October for paper returns. Most Crunch clients are eligible for online filing.

Why is my Directors loan account in positive/negative?

Directors' loan account (DLA) will increase (positive) if you: raise a dividend, run a payroll, pay for company expenses personally, pay money into the company account personally. DLA will reduce (negative) if you take personal withdrawals from the company account, and receive money from invoices personally. Also, DLA is a way of monitoring how much money is owed to or from the director of the company.

How do I delete an invoice?

Invoices are considered legal documents and therefore cannot be deleted. You’ll have to raise a credit note to cancel out the invoice. This is standard practice on accounting systems, not just Crunch.

How do I set up my salary/pay myself?

We have a quick video tutorial that will walk you through how to set up a salary and pay yourself in the Crunch software.

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We also have a handy guide on how to do this if you’d prefer to read than watch.

How much can I pay myself?

There are many different factors to consider when paying yourself a salary such as income tax and national insurance contributions to name a few. In short, if you’re a director of a business, it’s usually tax-efficient for most limited company directors to take a monthly salary up to the NI Secondary threshold of £758.33 per month, or £9,100 per year (2023/24 and 2022/23 tax years). If you pay yourself a salary up to the relevant National Insurance threshold from your limited company, you won’t pay any Income Tax or National Insurance on it as long as it’s your only earnings. We usually recommend this option on the basis of tax-efficiency.

However, there are often reasons why you might want to pay yourself a higher salary instead. As a director, you have the luxury of deciding how much you’d like to get paid, but we’d recommend doing your research and speaking to an accountant directly to ensure you’re paying yourself in the most tax-efficient way possible.

Read our complete guide on how much you can pay yourself as a limited company director, or take a look at our equivalent guide on salaries for sole traders.

How do I reconcile?

Reconciling is a beneficial part of your accounting to ensure all your invoices, expenses, and other important information is accounted for.

We have a step-by-step video guide on how you can reconcile in your Crunch account:

We also have a video that explains how you can import your bank statements into your Crunch account:

If you’d prefer, we have an article that outlines how to reconcile your bank account with Crunch.

How do I invoice without a VAT number?

One solution could be for your client to pay you what they owe for your service, and then pay you the remaining VAT once you’ve received your VAT number. This simply means that the VAT amount will show as “Outstanding” on the invoice until payment has been received, thus settling the invoice.

Another option is to reissue the necessary invoices showing the VAT number within 30 days. You’ll need to raise a credit note against the original invoice (without the VAT number) and then raise & issue a new invoice. This invoice will then show the VAT.

Find the full information on how to invoice when you’re awaiting your VAT number through our Crunch article.

Do I qualify for Statutory Maternity Pay (SMP) and how do I apply? How does it work?

Whether you qualify for Statutory Maternity Pay (SMP) depends on the type of contract you have (fixed-term, full-time, self-employed, etc) and can be affected by points such as your length of service. There are also rules and regulations to follow when it comes to SMP such as the notice you give and how long you’re able to claim it.

We have an article that will give you all the facts on SMP and how it works.

Still got a question?

We have a team of ACCA qualified accountants on hand at Crunch. Our Crunch Free clients can book a call through their Crunch account for a 30 minute time slot with an accountant for just £24.50 +VAT through our Ask an Accountant service.

Our Crunch paid subscription clients have access to our accountants included in their plan. Just drop an email to your client manager to request a call with an accountant.