ABC of Changing your Accountant in Dubai

ABC OF CHANGING YOUR ACCOUNTANT IN DUBAI

Accountancy is a fundamental part of any business and it is vital that accounting duties are executed properly. Moreover, than just dealing with the figures, most accountants offer a full-circle service of managing tax, bookkeeping and often payroll too which makes them a key part of many companies. But what happens if the service that your accountant is providing falls short of your expectations? Many people do not realize that changing your accountant if you are unhappy could be easier than you think.

1) Consider why you are unsatisfied

There are a number of common complaints which people may have with their accountancy service. Some of the most typical ones tend to lack communication with accountants failing to answer calls or respond to emails or not doing this in a timely fashion. Other problems center around fees charged by accountants with many finding this to be erratic and different each month making it hard for companies to budget for accountancy costs. Some also find that it difficult to meet costs when accountants charge them per phone call or email making it an expensive affair to seek even the simplest advice. Here are the complaints we hear the most:

  1. Phone calls and emails are not returned in a timely manner…or not at all.
  2. Proactive tax planning and strategic advice from the accountant simply don’t happen.
  3. Tax returns are often put on an extension instead of being filed on time.
  4. Inadequate answers are given to questions about tax law.
  5. The invoice amount is a “surprise”… after the services have been provided.
  6. Frequent correspondence is received from the government due to simple filing errors.
  7. An accountant is distracted from serving clients due to having other business interests.

The good news is that if you are unsatisfied with the service that you are paying for from your accountant, you do not have to suffer in silence.

2) Find a new accountant

This may seem like an unusual step, but the consequential tasks will make it clearer why this may be a beneficial first port of call. Firstly, consider the aspects of your current accounting offerings which are making you unhappy. If it is the unforeseen costs or ‘bill surprises’ then you could benefit by looking at accountancy firms that charge a fixed fee for their services, so you always know what you are going to be charged regardless. Whether you decide on a fixed-fee service or charge per service accountant, you should ensure that all chargeable fees are made transparently clear to you right from the beginning to avoid any surprises.

Another fundamental aspect is choosing an accountant that provides a comprehensive service, accountants use jargon on a daily basis, but a good accountant should be able to make all communication clear and stable for their clients. Most accountants will offer a free no-obligation initial chat which could help you to decipher if they could be right for you. Moreover looking for an accountancy firm who is members of well-established professional bodies like the Institute of Chartered of Accountants could offer you further peace of mind.

3) Switch over

It really could be as simple as that. In contrast with the misconception that changing accountants is a practically impossible affair, your new accountant could handle the whole switching process for you taking the weight off your mind.

Your accountant could write to your previous accountant and request all the necessary paperwork. You will need to sign a change of accountants’ letter which most accountants can provide you with and guide you through. People often worry that they may offend their previous accountant but the truth is that most firms have clients who move on at some point for one reason or another and will be used to dealing with this, members of the Institute of Chartered Accountants are trained on how to deal with this.

The most important thing is that you are paying for an accountancy service that you are fully satisfied with. Once the switchover has taken place, the final step is to discuss your business needs in detail with your new accountancy firm and explain exactly what you are hoping for so that they have the relevant information to provide you with the best possible solution.

So, if you are out there worried about replacing your current accountants, in this economic climate, don’t settle for less and contact us at profitsplus.ae to sort your accounting needs now.

 

 

The guaranteed way to raise money for your small business

Loans for business used to come under the banner of banks but that time is gone now. Banks now only lend money to companies which are low risk or can secure the loan amount against assets.

It is much more difficult in Dubai to get business loans as almost 80 percent of the population consist of ex-pats. Who may well exit, depending upon situations in both Dubai and home country. But it’s not as if they will not pay up on their debts before actually exiting.

Small businesses struggle the most as the cash flow is inconsistent at times which can hinder the growth of that business at times. The common traits which a failing small business has is them having an absence of funding and taking on more debt to pay the original debt off. Moreover, if the timing of these events is coinciding, this may well yell doom for the business itself. With that being stated, it is no doubt that small business is the lifeline of a country.

So how does a small business owner compete in not only the local market but with freelancers as well? Those freelancers sitting across the globe with lesser overheads.

Appropriate Practices for Business Owners

Investors, individuals or institutional, look for a number of things when deciding to lend:

  1. Owner – the character behind the enterprise is the most important, so emerge as a likable man or woman and professional in your enterprise endeavors. If you prepare a meeting, keep to it, if you want to make a payment do it straight away, if you make a promise, make certain to deliver on it. Your popularity will unfold shortly within the business neighborhood and amongst your peers. These are the equal individuals who could be contacted or approached for lending in the future.
  2. Accounts – hold precise debts from the day you begin and no longer when you want a loan. Maintaining accurate books is so important and have to no longer be ignored. Try to use a cloud accounting software program that offers you get admission to real-time administration accounts.
  3. Processes – create a stable workflow in your business, get organized, forms go in documents do now not draw. Keep data well organized, maintain a CRM device if possible.

These are just the basics of any enterprise and without these, you will war to elevate even the smallest loan.

Personal Loans

When borrowing for your small commercial enterprise it may also be less complicated to borrow personally, specifically if you are on an employee visa inside your personal company. Banks and Credit Cards (not recommended) will lend to personnel with 3-6 months of revenue proof.

The following are links to platforms that would be a good start to personal lending:
1.  SouqMal: This is an exquisite place to start for non-public lending. Applying via SouqMal will assist you to get admission to a heap of lenders in the UAE with just one application.
2. MyMoneySouq: Another amazing platform to get right of entry to hundreds of personal lending picks with just one application. Review the lending charges and the terms all online earlier than talking to anyone.
3. Friends & Family: Always the high-quality and cheapest option, subsequently the reason to be a high-quality individual two

Business Loans

Banks are the closing vicinity we recommend for Business Loans, there are many small enterprise pleasant alternatives and we analyze some of these below:

  1. Friends and family. At the top of the list are pals and family. Consider approaching those who are employed as a substitute than entrepreneurs. People who work have much less time to consider innovative investment alternatives and generally stop storing their money in financial savings debts paying less than 3% per annum. If you can offer them a return of over 5%-10% per annum, then you should be a better option for most humans who truly work and save.
  2. Beehive.ae, think about going to people but through a platform. Beehive is a peer-to-peer lending platform that connects small enterprise owners with buyers without the want for a conventional intermediary. Its focus is on finance from AED 100k on reimbursement terms from 6-36 months. Check it out on www.beehive.ae
  3. Eureeca.com, a terrific platform for those looking to raise extra than $200k. Launched in 2013 the group at Eureeca has helped many high increase corporations increase widespread amounts. Check them out on www.eureeca.com
  4. Dubizzle, What the…? I hear you ask, Dubizzle, Really? Well, Yes. Dubizzle is an exquisite platform in Dubai and posting in their business section for an investor, with as plenty detail as possible, does without a doubt work. Just be careful to pick the proper person.

Although there are many other options, I in my view accept as true with these are an exceptional vicinity to start, however, take note to make sure the following statistics in place:

  1. Access to a correct set of accounts. We can assist with that www.profitsplus.ae
  2. Good processes, software, and CRM. Check out Zoho CRM
  3. Try to maintain the enterprise in the blue by way of reducing overheads and growing your fees. Only develop when it is justified.
  4. A solid internet site will also assist and a top nice online presence.

Good Luck with your fund-raising exercise and do message me if you need any help. If you want to speak to an advisor to help you with VAT, Funding or Accounting in AE then contact me, Ali Afzal, on +971585442030 or email me on [email protected]

 

Understanding VAT in the UAE 2020

You may know nothing about VAT Accounting, but that doesn’t mean that you should remain ignorant. If you’re a VAT taxpayer, the more you know about it, the more benefit you and your business can derive from it. Here are five essential things that you need to know about VAT in UAE.

VAT Registration and De-Registration

How do you know whether you should register or de-register for VAT? If your turnover is more than AED 375,000 per year, you must register for VAT. If your turnover for the year is under AED 375,000, you are allowed to de-register or apply for voluntary registration. Once you’ve registered for VAT, that’s when a VAT consultant will be useful to you. They can advise you on the latest regulations and keep you and your business on the good side of HM Revenue and Customs.

VAT Schemes

Businesses that are registered for VAT need to account for tax when they invoice customers or when their own suppliers invoice them. HM Revenue and Customs has a number of VAT schemes that allow your business to save time or only account for VAT when they are actually paid. To work out which scheme bests suits you, seek the qualified advice of an experienced VAT advisor.

VAT Records

It is your legal and mandatory obligation to keep accurate VAT records regarding any tax paid or received. You need to keep these records for a fixed number of years and there are penalties for poorly kept records. Keeping accurate VAT records helps you to avoid paying too much tax. To find out more about keeping accurate VAT records, speak to a VAT accounting specialist.

VAT Responsibilities

Do you know what your VAT responsibilities are? If not, you could fall foul of the VAT penalty system. A VAT consultant will let you know your VAT responsibilities and help you to stick to them. You don’t need to be a VAT expert when you have a VAT adviser, they’ll keep you informed of all your responsibilities regarding Value Added Tax.

VAT Penalties

As of 2017, a brand-new VAT penalty system is in place. There are two scenarios under which a penalty will apply. The first is in the case of failure to notify about an under-assessment. This occurs when a VAT Return is not submitted, and Customs have to estimate the assessment. If this assessment is lower than the actual figure it should be and the taxpayer does not inform HM Revenue and Customs, then a penalty is liable.

Second, when someone submits a document that includes an error, this will also trigger a penalty. An error when reasonable care was not taken will be punished with 30% penalty. An error which is deliberate but not concealed from HM Revenue & Customs will be punished with a 70% penalty fine. Finally, an error which is deliberate and where concealment can be proved will result in a 100% fine. By using a professional VAT consultant, you can avoid making mistakes and paying the price for it.

Exemption from VAT

If you have an alternate license in the UAE (LLC or Freezone) and do not function in Dubai and obtain all profits from outside UAE, then you may qualify for exemption from VAT, but you nevertheless MUST practice for this through the FTA. Banks will request this and may also hold repayments as a result. This is also regarded as zero-rated supplies.

To benefit from the expertise and experience of a VAT adviser visit profitsplus.ae to find out how they can help you manage your VAT accounting.

Top 3 Ways A CFO Can Help Your Business

Every business is sure to benefit from having a chief financial officer overseeing accounting and finances. These top-notch financial advisors help to keep all of your reports and bookkeeping up to date as well as give useful financial advice and strategy to keep your business on track and meeting margins.

But paying out AED 700,000 a year for a full-time CFO consultant can be a lot more than many smaller businesses, such as client companies, can reasonably spend. But before you count yourself out on being able to hire these useful consultants, did you know that part-time CFO services are making involved and dedicated financial analysis available to all businesses? With the possibility of paying for a CFO on an as need basis, there’s no reason why you can’t cash in on all of their knowledge and skills.

Chief financial officers supervise the accounting staff and on occasion controllers as well. They make sure that all of your accounting operations are in order and now play a bigger role in the planning and direction of businesses than ever before.

In fact, a CFO consultant in Dubai offers a lot of additional benefits:

  • Financial strategy, such as the development and execution of any new or existing plans.
  • Contingency planning to help see you safely through any soft markets and customer demand crises before they can happen.
  • Business analysis to pinpoint any possible issues that need to be rectified if you want to get margins back in line.
  • Business planning to help you meet or set up long term goals as well as forecasts to aid in planning.
  • The valuable insight that can challenge the way you view your business and help it to grow.
  • Extensive knowledge with other companies that will get them asking the right questions you should think about, as well as what strategies are proven to work.

Part-time CFO services can give you all of these benefits but only at the hours, you need. Whether it’s just a few days a week or even per month! They can be in the office regularly enough to make sure everything is running smoothly, and your financial operations are in order without you paying the salary of a full-time CFO consultant.

Their easier hire in and out also makes them the perfect resource to use to keep things running while your current CFO is out or if you’re looking to hire the right full-time CFO. Many part-time CFO services offer interim CFO’s to fit these small gaps so you don’t have to worry that your financial operations will fall apart while your current CFO is on medical leave or you’re currently searching for a new one.

You can also bring them in to temporarily head up projects that your other staff are too busy to get to. Have a massive sales opportunity coming up, but all of your workers are too tied up or inexperienced to assist? A short-term CFO can get it out the door and only need to be paid for the time that you need them. Along with that, their more temporary or part-time status also makes them much easier to dismiss as opposed to a full-time salary CFO consultant.

So if you’ve been feeling that your financial operations could use help, or if you’ve wanted the advice of a trained professional, a part-time CFO could be right for you. And with the ability to hire them on as need basis, there’s no reason why your business can’t have the same edge as the big guys.

If you need dedicated and professional CFO services at an affordable price and availability, profits plus accountants is the place to go. With an assortment of solutions and a sincere dedication to making your business a success, you’re sure to be well on your way to the growth and expansion you’ve always wanted.

Zero-Rated VAT for Companies in the UAE

Zero-rated vat agencies based totally in the UAE review their unique VAT application.

There are numerous customers who while being located here in the UAE, are using zero-rated supplies which begs the question, whether this person should consider registering themselves for VAT.

Many clients, who were part of the esteemed profits tax consultants, have been reported to register for vat during the closing of 2019, or else they would have faced banking problems with transactions.

Some of these clients even as far to confess that their institutions made them register for vat as they had large sums of money coming and going via their own accounts.

Which again begs the question that, what is the appropriate approach to registering for zero rated vat?

So we went ahead on your behalf and asked the FTA, their answer is as quoted;

‘If you only make zero-rated supplies, you can also follow to be excepted from registering for VAT.

You still need to complete a VAT registration application, but you should reply “Yes” to the question: “Are you applying for an exception from VAT registration?”

This actually means that if you have an organization in the UAE producing zero rated supplies, then it a dire necessity to have to register for vat in UAE with the FTA. The only problem is the softwares which need to be set up properly for them to work.

Let us put it into perspective that, all of our zero-rated buyers have put in the incorrect vat utility and can no longer declare that they are taking advantage of an exception to the generally followed rules.

Some of our customers have experienced losses or penalties of up to 20,000 AED because of asking for amendments in the wrong way. They failed to realize that all their supposed amendments needed to be made within the 20-day limit set by the FTA

So, it is our profound recommendation that you thoroughly check your initial vat application, and that it was made in the correct order. With that being stated, we can surely rely on the FTA to begin inquiries into companies who stated on their forms, sales of up to 6m AED but failed to reach that milestone.

 

4 Quick Facts About Registering for VAT in the UAE

THE TRUTH About VAT in the UAE

Registering for VAT in Dubai should not be taken gently and certainly now not regarded section of the process of operating in Dubai, you only need to register if you qualify or if you exceed a threshold. Failing to adhere to the Federal Tax Authorities in Dubai is a serious offense and can incur heavy penalties. Below are 7 records that you have to recognize earlier than registering for VAT in Dubai.

Individual Responsibility

When you register for VAT you are registering the character that is running a business, no longer the enterprise itself. Ultimately it is the character who will be accountable the vat and the duties that come with registering for VAT with the FTA. This duty ought to not be taken lightly and it is eventually linked returned to your Emirates ID.

A character can solely preserve one TRN for VAT purposes at any one time. It is your accountability to make sure that reproduction functions are not submitted.

When do I want to register for VAT?

There is no want to register for VAT with the FTA when beginning your change license. There is so a good deal incorrect advice on this matter. The principles requirements of VAT are constant and consequently, it is no longer a desire to register when setting up a company.

Mandatory Registration – if you meet the following criteria then you must register immediately:

  • Your turnover was once greater than AED 375,000 in the final 12 months; or
  • You anticipate that your turnover will be greater than AED 375,000 in the subsequent 30 days.

Voluntary Registration – if you meet the following criteria then it is your preference alternatively your next 12 months will play a vital element on whether you have to register voluntarily or not:

  • Either your turnover or charges (which will be difficult to VAT) have been extra than AED 187,500 in the ultimate 12 months; or
  • You assume that either your turnover or prices (which will be a challenge to VAT) will be extra than AED 187,500 in the subsequent 30 days.

Exemption from VAT

If you have an alternate license in the UAE (LLC or Freezone) and do not function in Dubai and obtain all profits from outside UAE, then you may qualify for exemption from VAT, but you nevertheless MUST practice for this through the FTA. Banks will request this and may also hold repayments as a result. This is also regarded as zero-rated supplies.

Branches are not separate felony entities

Only the entity of which they are branches practice for registration where that entity meets the applicable criteria. Even if you are running by using branches in extra than one Emirate, only one VAT registration is required.

Updating your details on the FTA portal to avoid AED 15,000 Penalty

keep up to date

AED 15,000 The failure of the Registrant to inform the Authority of any circumstance that requires the change of the information pertaining to his tax record saved by Authority

FTA in Dubai kingdom that if you fail to inform them of adjustments in any situations you will incur a penalty of AED 5,000 initially and AED 15,000 for repeating it.

The principal gadgets that go out of date are as follows:

  • Trade License
  • Emirates ID
  • Possible Passport Copy

The above are fundamental items that should always be updated when they are renewed, however the troubles arise when you are updating the items.

The FTA portal has been updated to make mandatory the need to encompass your financial institution account and power of authority, these objects had been not mandatory when many groups registered for their TRN wide variety in 2017.

Also for some agencies, the FTA uae requires them to grant a monetary announcement to verify the income and fee for the last 12 months. I would surely urge business owners to seek advice from a tax consultant when doing this as many groups are incorrectly registered for VAT and supplying such monetary statements ought to cause the FTA to request other information subsequently leading to a penalty of either AED 10,000 for failing to deregister or AED 3000++ for submitting and mistaken return.

To be sincere this is all it takes to preserve your FTA portal updated and in addition to the above the basics such as contact important points can only be up to date via an electronic mail to the FTA and not thru the portal.

Ali Afzal is the Managing Director and VAT accounting Consultant in UAE for Profits Plus Accountants registered as Profits Accounting and Bookkeeping a British Owner Managed Accounting Firm in Dubai. We manage over 100 clients vat submissions and cater for clients from around the World. We are registered with Xero Cloud Accounting as a Silver Tier Partner and our fees start from AED 850 per month. Contact me on [email protected] for more information.

 

Making Tax Digital in the UAE

making tax digital dubai

Filling out taxation forms and filing for returns is a time-consuming process, it can sap all our energy and disrupt our schedules but change is happening and tax authorities around the world are shifting from traditional filing methods to all integrated digital platforms often integrating with third-party software’s to capture the masses and make it easy for clients and advisors to partake in the digital tax revolution.

What is digital taxation?
Digital taxation is set to revolutionize the way businesses file for their taxes. No longer would business owners need to fill out self-assessment forms and prepare their taxes when software can handle all that for them. Digital taxation is the process of using compatible cloud accounting software to file taxes.

Cloud accounting software can also help with the day-to-day functionality of your business. They can help you track transactions, keep accounting records and prepare invoices. They can even help you avoid legal penalties by archiving and managing your records.

Making Tax Digital (MTD) in United Kingdom (UK)

When it comes to digital taxation, the UK is the undisputed frontrunner. UK Government’s non-ministerial tax collection wing, also known as Her Majesty’s Revenue and Customs (HRMC), is collaborating with accounting software developers to digitize the tax administration system by 2020 through its MTD campaign. The campaign aims to make tax collection simpler and error-free.

MTD replaces manual processes such as form filling and paperwork with accounting software. It also reduces the HRMC’s overhead expenses. It saves both time and money by standardizing the tax process through technology.
MTD requires VAT-registered businesses to maintain their records digitally. It is also compulsory for businesses to use the MTD software to file their returns before April 1, 2019.

UAE taxation system

Digital tax seems convenient and hassle-free so when will it be launched in UAE? The UAE government is also making attempts to digitize taxation procedures. Take, for instance, the digital stamps the Federal Tax Authority (FTA) introduced for tobacco products.

Yet, the progress remains slow and steady. Right now though, the UAE government only has an e-portal for taxation. Users can visit the portal to fill out their required information. The process remains manual since the portal is not synced with accounting software.

We can’t wait for when the UAE government introduces this system and simplifies the tax system.

How can digital platforms help with taxation?

Innovative digital platforms are sprouting up to assist people with their tax claims and planning. Platforms like the UK-based RD Vault can sync with accounting software to generate invoices, update books, prepare tax credit claims and track their progress. One such solution is Xero, a Cloud Accounting Software solution used by Profits Plus Accountants and tax consultants in Dubai.

Xero is an all-in-one solution, it can be used to prepare reports and maintain taxation records. This enables you to use one platform instead of a cluster of applications to deal with your accounting and taxation needs.

If you are interested in knowing how a cloud accounting software such a Xero, can help your business then feel free to get in touch with Mubashir Malik, Partner at Profits Plus Accountants in Dubai, UAE. Contact Ali Afzal by email on [email protected] or call on 0585442030.

 

Xero Cloud Accounting Partner in Dubai

Xero cloud accounting is one of the most exciting innovations in accounting. Profits Plus Accountants are a Silver Partner with Xero Cloud Accounting. More importantly, we engage with all clients through Xero Cloud Accounting and this approach earned us the title of ‘No.1 Xero Cloud Accounting Partner in the UAE’.

Currently, 95% of our clients are taking advantage of the free subscription offered to Xero Cloud Accounting software only available through Profits Plus Accountants. Similarly, you too can get your business on Xero Cloud Accounting and work with the only accounting company in the UAE dedicated to cloud accounting.

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VAT Submission Deadline [must know]

vat submission dealine

VAT Submission Deadline

VAT registered business owners have a responsibility to submit their VAT return to FTA on time every 3 months (the first submission period after you register will vary for each company). According to the FTA, AE, fine for the failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law is AED 10,000 the first time and AED 50,000 if repeated.

Administrative penalties for violations have been issued by Cabinet Decision No. (40) of 2017 and can be found under the Legislation section on the AE FTA  portal.

VAT Submission Procedure

Every 3 months you need to calculate the difference between your input and output tax and submit the summary to the FTA AE with a breakdown of the emirates in which the sales were generated. Ideally, you should generate a P&L and Balance Sheet at the same time and there is a very good reason for doing this.

Although the deadline to submit your VAT return to the FTA is 28th of the following month after the VAT Period, you should submit the FTA VAT return to the FTA by the 25th. You need to give yourself enough time to make the VAT return payment to the FTA. To learn more about how to make the payment please refer to our blog post on Making A Payment To The FTA.

Profits Plus Accountants

We are a British Accounting Firm in the UAE based in Dubai, we help local businesses to navigate the FTA requirements and we use the most advanced cloud accounting software in the World to make sure that you remain 100% compliant.

Speak to Ali Afzal, a Managing Partner at the firm. You can reach directly on email [email protected].

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.