The guaranteed way to raise money for your small business

Business loans used to be the responsibility of the banks, but that is no longer the situation. Banks want to lend to companies that carry a low risk or have enough assets to secure against the loan amount.

Business loans in Dubai are even more difficult, especially since 80% of the population is made up of Expats that could exit anytime their situation changes either in Dubai or in their hometown. Not that they would leave without paying their debts………..

Small businesses are the lifeline of a any country but most small businesses struggle with cashflow and this can significantly hinder growth. Lack of funding is also required when a business ends up having to write off bad debt and lack of access to timely funding can cripple a business if that was to happen.

So how can a small business owner access funding in such a global market when they are competing not only with local competition but with a freelancer living on the other side of the World with less than half the overheads.

Good Practice for Business Owners

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

1. Owner – the individual behind the company is the most important, so become a likeable person and professional in your business endeavours. If you arrange a meeting, keep to it, if you need to make a payment do it straight away, if you make a promise, make sure to deliver on it. Your reputation will spread quickly within the business community and amongst your peers. These are the same individuals who could be contacted or approached for lending in future.

2. Accounts – maintain good accounts from the day you start and not when you need a loan. Maintaining accurate books is so important and should not be ignored. Try to use a cloud accounting software that gives you access to real-time management accounts.

3. Processes – create solid workflow in your business, get organised, paperwork goes in files not draws. Keep records well organised, maintain a CRM system if possible.
These are just the basics of any company and without these you will struggle to raise even the smallest loan.

Personal Loans

When borrowing for your small business it may be easier to borrow personally, especially if you are on an employee visa within your own company. Banks and Credit Cards (not recommended) will lend to employees with 3-6 months of salary proof.

The following are links to platforms that would be a good start to personal lending:
• SouqMal: This is a great place to start for personal lending. Applying through SouqMal will help you access hundreds of lenders in the UAE with just one application.
• MyMoneySouq: Another great platform to access hundreds of personal lending options with just one application. Review the lending rates and the terms all online before speaking to anyone.
• Friends & Family: Always the best and cheapest option, hence the reason to be a nice person 😊.

Business Loans

Banks are the last place we recommend for Business Loans, there are many small business friendly options and we analyse some of these below:

1. Friends and family. At the top of the list is friends and family. Consider approaching those who are employed rather than entrepreneurs. People who work have less time to consider creative investment options and usually end of storing their money in savings accounts paying less than 3% per annum. If you can offer them a return of over 5%-10% per annum then you could be a better option for most people who simply work and save.

2. Beehive.ae, consider going to people but through a platform. Beehive is a peer-to-peer lending platform that connects small business owners with investors without the need for a conventional intermediary. Its focus is on finance from AED 100k on repayment terms from 6-36 months. Check it out on www.beehive.ae

3. Eureeca.com, an amazing platform for those wanting to raise more than $200k. Launched in 2013 the team at Eureeca have helped many high growth businesses raise significant amounts. Check them out on www.eureeca.com

4. Dubizzle, What the…? I hear you ask, Dubizzle, Really? Well, Yes. Dubizzle is amazing platform in Dubai and posting in their business section for an investor, with as much detail as possible, does actually work. Just be careful to select the right person.

Although there are many other options I personally believe these are a great place to start, but remember to ensure the following information in place:

1. Access to a good set of accounts. We can help with that www.profitsplus.ae
2. Good processes, softwares, and CRM. Check out Zoho CRM
3. Try to keep the business in the blue by lowering overheads and increasing your fees. Only grow when it is justified.
4. Solid website will also help and a good positive 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 then contact me, Ali Afzal, on +971585442030 or email me on [email protected]

Zero-Rated VAT for Companies in the UAE

Zero-rated vat companies based in the UAE should review their original VAT application.

We have many clients who are based in the UAE and deal in zero-rated supplies. The question this creates is whether or not this client should be registered for VAT or not.

Firstly we have had many clients join Profits Tax Consultants where they registered for VAT last year in 2017 assuming they had to be registered or else they would have banking issues. In fact we have even had clients claim they were forced to register by their bank account managers because they had large amounts of money going through their account.

So, what is the right approach?

Well we asked the FTA and this is the reply we got;

‘If you only make zero-rated supplies, you may apply to be excepted from registering for VAT.
You must still complete a VAT registration application, but you should answer “Yes” to the question: “Are you applying for an exception from VAT registration?” (Please refer to the additional instructions provided in the Authorized Signatory section in the application).’

So what does this mean, well firstly if you have a company based in the UAE making zero-rated supplies then you still have to register with the FTA BUT that the Vat application must be done correctly.

To put is into perspective till date every one of our xero-rated clients have made their vat application incorrectly and have not made it clear that they are applying for ‘an exception’.

This causes major problems and as such some of our clients have experienced AED 20,000 penalties as a result of requesting amendments incorrectly. Amendments must be made within 20 days of ‘realising’ the error.

Going forward, please check that your initial vat application was made correctly, we expect the FTA to start asking companies to explain why they are not making AED 2m to AED 6m sales when it was clearly stated on the application.

Note: zero-rated must not be confused with exempt of vat which we will discuss in our next post.

Let Profits Tax Consultants with over 20 years of VAT experience and dealing with UK tax inspectors deal with your VAT matters email us on [email protected]

ABC of Changing your Accountant in Dubai

Recently we had clients approach our firm wanting to know how they can change accountants and if it will cause problems. I therefore decided to write this article to explain the ABC of changing your accountant.

WHEN TO CHANGE ACCOUNTANTS

Have you found yourself asking the following questions;

  • Am I getting value for money – assuming you know the value you want?
  • Does my accountant fully understand my business needs and what the plans are to grow the business in the future.
  • Is the service satisfactory and are returns filed in good order and on time?
  • Could I get better service elsewhere?
  • Has my business outgrown my accountant?
  • Is my business treated like just another number to a large firm of accountants?

Changing your accounting partner is not something that many companies do lightly, but there are some reasons situations that make it inevitable;

  1. When your accountant fails to submit your VAT Return on time, provided you shared all information required. Failure to submit your VAT Return on time incurs AED 1000 penalty. Firms that fail to notify their clients of their VAT deadlines or fail to promptly follow-up are basically not using any form of practice manager or CRM to manage their client base. This will definitely lead to bigger problems in the near future.
  2. When you don’t get management reports regularly or when requested within a reasonable time-frame. Try asking your accountant to provide you the last VAT Report breakdown, or your latest Profit and Loss or Balance Sheet. If the the firm is unable to provide this information, then the same situation can cost AED 10,000 fine when requested by the FTA. We will typically provide ANY of these reports within 24hrs to ANY of our clients.
  3. When you must wait more than 30-60 days to have the last months accounts closed. If they are unable to close your accounts within 7-10 days of receiving all the data, then you know that they are either under staffed, or disorganized and this is a problem waiting to go from bad to worse.
  4. When the accountant is unable to answer technical VAT questions immediately then you must consider that they either lack the knowledge or experience to deal with VAT and this can prove to be costly later down the line. Imagine if they do not understand VAT or lack the experience then the amount of errors that they are accumulating will be very costly to you when the FTA do their investigation.

HOW TO CHANGE ACCOUNTANTS

The process of joining Profits Tax Consultants involves:

  1. Select a changeover date that is going to cause the least disruption in your business. Typically the end of a VAT Return period is ideal.
  2. Ensure all financial responsibilities to your accountant are discharged i.e. all outstanding bills paid.
  3. Inform your current accountant that you are planning to change and they have permission to converse with your new accountant for the purpose of handover of paperwork and information. Of course, if you want to avoid the possible awkward call or email to say you are leaving them, we can draft a letter for you to sign and send it on your behalf.
  4. Your new accountant will write to the outgoing accountant asking for professional clearance along with any relevant paperwork. In this letter, we will ask your old accountant if there is any reason why we cannot take you on as a client. This is a professional formality and does not normally present any problems. The information collected will include previous year’s accounts & tax returns, reconciliations and any bookkeeping work they may have done on your behalf. Your old accountant should provide the information within a “reasonable time” for which there may or may not be a fee. It should not be more than an hour charged.
  5. Before joining us we will usually send our new client application form to capture your personal and company information. A ‘Scope of Works’ sets out the expectations and requirements between the client and the accountant which needs to be agreed and signed. Usually there are standard terms of business and a separate fee letter. Make sure this is signed and returned to us otherwise it is assumed to be agreed after 31 days from the date issue.
  6. After a few weeks, assuming there are no hold ups, all your accounting information should have been transferred and you will be safely on board with us.

CONTACT US

Profits Tax Consultants are happy to meet with people for a no-obligation discussion on what we can offer you & your business, and what you would require from us. Price alone is never the determining factor. Call us on +971585442030 or email on [email protected]

 

 

 

Submitting a VAT correction? This is a must read!

Considering submitting a correction to your previously submitted vat calculations?

If you become aware that a VAT Return that you have submitted previously contains errors that resulted in a calculation of payable tax being less than required by not more than AED 10,000, then you can correct this error in the current VAT Return in which you have discovered the error. Under the “VAT Amount” column, you should only declare the VAT amount of the correction.

If the error has resulted in a calculation of payable tax being less than required by more than AED 10,000, you should make a Voluntary Disclosure. We would urge you to review the FTA publication named Voluntary Disclosure – User Guide https://www.tax.gov.ae/pdf/Voluntary-Disclosure-user-guideEnglish.pdf

To avoid doing this incorrectly contact the experts: Profits Tax Consultants on [email protected]

Profit Margin Tax Scheme [Used Car Sales]

Profit margin tax is a value added tax (VAT) scheme created by the FTA for the benefit of the used goods industry.

The scheme allows VAT to be applied only to the profit portion of the goods sold, provided full VAT has been charged on the goods previously (and not claimed back).

Working Example

Ahmed buys a brand new car from a dealer in Dubai. He pays AED 100,000 plus 5% VAT. Regardless of how he purchases the car i.e full cash or on finance VAT of 5% has been paid on the total value of the car. Now since he is a consumer and not a VAT registered business he will NOT be able to claim the VAT back.

6 months later Ahmed decides to sell the Car to Khaled (a used car dealer) based in Dubai. After agreeing on the price of AED 80,000 Khaled pays Ahmed in cash. Ahmed then sells the car through his showroom for a price of AED 85,000.

Lets calculate his VAT liability

Purchase Price AED 80,000
Selling Price AED 85,000
Profit AED 5,000
VAT Liability (5% of AED 5,000) AED 250

Common Mistakes

  1. Deducting expenses before calculating the Profit; there is no provision in any FTA publications that allows for the deduction of expenses on the used car before calculating the Profit element on which the VAT is applied. Therefore you cannot deduct car polishing, car repairs, and other expenses before calculating the Profit on which VAT is applicable.
  2. Charging Profit Margin Tax to used cars 2017 or earlier; Profit Margin Scheme can only be used for cars where the FULL VAT has been previously applied, therefore since cars previous to 2017 or earlier have not had the full vat applied it is not possible to apply the Profit Margin Scheme to these cars.

NOTE: Profit Margin Tax  can still be applied to cars 2017 or earlier but only if the full vat was applied by a used car dealer in the chain of events.

To learn more about the FTA and read their publications please visit: Ministry of Finance (click here)

Profits Tax Consultants are a British Accounting and Tax Consultancy in Dubai. We look after many used car dealers and offer digital software to help you manage your used car showroom. Contact Ali Afzal on 0585442030 to arrange a free consultation or contact us here (click here)

Cloud Accounting [Xero] v’s Traditional Accounting [Tally]

The Evolution of Cloud Accounting 

In the past few years, we have witnessed the birth and rapid evolution of cloud computing, with more and more traditional services being replaced by their far more efficient, affordable and secure cloud alternatives. Accounting is no different and thanks to the hectic pace technology is moving at, the question is no longer whether you should move to cloud accounting but rather, when.

Problems with traditional accounting software

The drawbacks of traditional accounting software certainly play a role in the shift to cloud accounting. The data in the traditional accounting software system isn’t up to date and neither is the software. What’s more, the software only works on one computer – the data needs to be manually transferred between devices, usually by virtue of USB drives. This presents a myriad of other issues, mostly to do with security and reliability.

Traditional accounting software and services are outdated since they are rooted in the idea that only one person should have access to the data. This means that important people within your business may not have access to the financial and customer details, which impairs productivity and diminishes the level of customer service your organization can provide.

What’s more, traditional accounting software tends to be costly and updates and regular maintenance are expensive (often not included in the initial price), time-consuming and challenging especially if you’re not tech-savvy. Keeping backups is rarely one and even then, it may cost you more time and money than it’s worth.

When it comes to your company’s financial needs, you cannot afford to settle for outdated accounting services that charge you too much while bringing almost no value to the table. What you need is an experienced, qualified and pioneering accounting firm that will handle every single detail, provide you with cutting-edge accounting tools and allow you to focus on your company’s future growth instead of book-keeping.

What is cloud accounting

Cloud accounting is the alternative to traditional accounting software, whether it’s on-premises or self-install. The only difference is that cloud accounting is hosted on remote servers, similar to the Software as Service business model: data is sent to the cloud where it can be processed and returned to the user.

This means that all functions are performed off-site, rather than on your desktop which minimizes issues related to reliability and security. All you need to take advantage of cloud computing is a reliable connection to the Internet or another network via a cloud application service provider. Because of that, cloud accounting is far more flexible than traditional software – the accounting data can be accessed from any point around the world and from any device that has an Internet connection. What’s more, cloud accounting software like the one Profits Tax Consultants use can update your financial information automatically and provide you with real-time financial reporting.

Profits Tax Consultants is a cloud-based accounting firm based in Dubai that will go above and beyond to ensure that your company is provided with CFO-level accounting services and support your company’s growth and expansion. Our state-of-the-art cloud-based software is run by experienced British accountants who have spent more than 20 years of working with British companies and VAT.

Xero Cloud Accounting Software

One of the key players in the shift towards cloud accounting is Xero, a New-Zealand-based software company that develops cloud-based software for small and medium-sized businesses. Their software lets companies share access to the latest business numbers with their teams, accountants and bookkeepers so everyone – including team members around the world – are kept in the loop and up to speed.

This means that you can easily log into any Xero file you want by simply using your Internet connection. You can share access with your accountant who in turn can not only open the file but make adjustments, prepare and lodge BAS and tax returns, and provide real-time assistance if needed. This saves up time and money as the accountant doesn’t necessarily have to send the data back and forth, either digitally or physically.

We at Profits Tax Consultants truly believe Xero has transformed the modern world of accounting. Instead of having a monthly meeting with your accountant where you pile mountains and mountains of paper files, you can easily manage your accounting information in real-time. This helps you make faster and more effective decisions. Unsurprisingly, in the past 12 months alone, Xero has shipped more than 1,2000 features and product updates, most of them designed to provide accountants with back time and helping them migrate to methods of value-priced billing while increasing their workload at the same time.

Profits Tax Consultants is a 100% cloud-based accounting service, which means that you will be able to take advantage of the flexibility, convenience, and practicality of a cloud service based on the Xero Cloud Accounting Software. In addition, we will integrate accounting systems inside your company, offer you book-keeping as well as expense management services that will enable you to monitor your company’s growth, expenses and earnings.

Benefits

In a nutshell, cloud accounting software like Xero enables professionals to save time, and businesses to enjoy greater flexibility, reliability, and security when it comes to financial operations. Xero certified accountants can create a lot of efficiencies going beyond that of manual data entry: using the cloud service, they can finally have time to analyze the work and truly help small businesses remain cash flow-positive.

Some of the benefits associated with using cloud accounting software are increased accessibility, productivity, organizational reporting and improved back-up and recovery. Cloud accounting can improve the productivity within your organization by saving you enough time to focus on actually running your business rather than spending valuable resources on bookkeeping and accounting.

What’s more, a Xero certified accountant can access your accounting and financial information from any point around the world. This makes it the ideal option for businesses that have remote employees or work with accountants from abroad. This also frees you from having to install and maintain software on individual desktop computers (so you can save money on your IT infrastructure and training expenses). With cloud accounting, you can also improve the communication within your business as employees in other departments, branch offices or remote areas can access the same data and version of the software, and make changes if needed.

Xero also makes it easier for you to get real-time reporting and visibility throughout your organization. With cloud computing, subscription-based models are the most popular option – you can pay a subscription to receive updates as soon as they’re launched, without having to invest more money in additional software purchases.

Xero also provides you with better backup and recovery capabilities. Cloud accounting makes storing and recovering data more convenient and reliable than in-house servers. All these benefits also ensure cloud computing is one of the most, if not the most, cost-effective option on the market. If you’re looking for a Dubai accountant, working with someone who is Xero certified can save you a lot of time and expenses in terms of maintenance and management of data and servers.

What the future holds

Given the many benefits cloud accounting offers to small and medium businesses, it’s not surprising that experts believe that cloud accounting will become the new normal. What’s more, Xero and similar software may become even more important and relevant as AI and machine learning grows in popularity.

Since we are a 100% cloud-based firm, we are able to offer you high-value, low-cost accounting services by cutting down on conventional, obsolete and expensive hardware and software and passing those savings on to you and your brand. Our mission is to establish an honest, trusting and lasting relationship by going the extra mile and ensuring your satisfaction. Choosing Profits Tax Consultants means having a whole team of highly-experienced British accountants at your disposal 24/7.

If you’re looking for a Dubai accountant but have not yet made the switch to cloud accounting software, it may be a good idea to put a framework in place as soon as possible. Steadily working towards a plan is the key to enhancing what you already have and prepare for the future – and by the looks of it, the future of accounting is synonymous with cloud accounting.

This whitepaper was written by Ali Afzal, the Managing Director of Profits Tax Consultants and Accountants in Dubai. We provide cloud accounting services starting from AED 850 per month and you can learn more about the software on www.profitsplus.ae/software or visit us Xero on https://www.xero.com/uk/advisors/accountant/2017/profits-tax-consultants/ .

Tally ERP 9 [the ugly truth] by Profits Tax Consultants

Thinking of purchasing Tally ERP 9? Read this article before making that decision.

Just because Tally is an FTA registered software does not make it a good solution nor does it mean that you cannot choose any other software that is not FTA registered.

Disadvantages of Tally ERP 9

1. Not user-friendly at all. I have met many CEO’s and In-House Accountants who contact me soon after setting up Tally ERP 9 and ask me to provide them with our accounting services simply because they realize how complex it is to use Tally ERP 9. Unless you are a qualified accountant or have employee a qualified accountant with at least 2 years’ experience Tally ERP 9 is just not user friendly and thus not appropriate for small businesses with limited resources.

2. Single screen software. Tally ERP 9 does not allow you to work on more than one ledger at a time which makes it difficult to review work whilst making entries into the ledger. This is a very basic function and means that it really slows down the accounting process.

3. Useless paid upgrades. You have to purchase any upgrades and in fact there is little noticeable difference between Tally 4 and Tally 9 but the cost of upgrading is expensive as you require call out from Tally Partners and typically this will cost between AED 1000 and AED 2000 per installation.

4. Not ideal for multi-branch. The only way to operate tally from multi-sites is to use VPN and this is hardly practical today. To make it effective you have to invest in servers and LAN bundled with Tally.net and then don’t forget the consultancy and implementation costs.

5. No flexibility on Chart of Accounts. The default setting button is not provided and if you want to change the setting after configuration settings are done you will have to restart and delete all the ledgers and start again from the beginning. Once you have created the journal voucher it is not possible to make changes in it. This makes Tally 9 very rigid and difficult to use.

6. No central support. Tally 9 is not supported centrally by Tally itself and instead you have to rely on the partner network and the fees charged can vary significantly as well as the level of expertise, not always related.

7. Low Security. Do not lose your password as it is difficult to retrieve data without the password and very time consuming.

8. Loss of data. Since Tally ERP 9 is desktop or server based the risk of losing your data is huge should your machine crash or become infected by a virus.

9. No customization or module integration. It is not possible to custmise Tally 9 or integrate with any other software.

Still thinking of purchasing Tally ERP 9?

I didn’t think so.

As an alternative consider Xero Cloud Accounting Software. We are a xero certified silver partner in Dubai and provide the software free of charge as part of our vat accounting packages: https://profitsplus.ae/our-plans/

Profits Tax Consultants is a tax consultancy and accounting firm based in Dubai and licensed by the DED. We provide fixed fee accounting services to businesses all over Dubai and Sharjah. We provide free VAT compliant cloud-based accounting software and we are the only firm in the UAE to provide real-time accounting services through our unique cloud powered business model. Visit us on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants. Connect with me on Linkedin: https://www.linkedin.com/in/aafzal1/

Paying your VAT to the FTA by Profits Tax Consultants

That time of the year has arrived when many small businesses have submitted their VAT return and are now making VAT payment to the FTA.

Below are the options on how to make payment to the FTA (caution each one has a cost associated and you should check all options to find out which is the cheapest – we suggest the exchanges):

  1. Paying via e-Dirham or credit card through the FTA Portal.

Yes the most obvious is to log in and pay via e-dhirham or VISA and Mastercard. This option is simple, quick and for those last minute payments probably the best option. Although we have not tested the e-dhirham option the VISA and Mastercard do seem to be very expensive option.

  1. e-Debit payment option allows the Taxable Person to directly debit the amount to FTA’s bank account when making any due payments.

You can make a payment through e-debit and the fee for using eDebit is AED 10 which will be charged by e-Dirham. This option only works if you have a bank account with any of the following banks:

  • Citibank (Retail)
  • Commercial Bank of Dubai (Corporate and Retail)
  • Dubai Islamic Bank (Retail)
  • Emirates NBD (Corporate and Retail)
  • First Abu Dhabi Bank (Corporate and Retail)
  • Noor Bank (Retail)
  • Standard Chartered (Corporate and Retail)

Please note that this is an initial list of banks and the list may have changed and its ideal to check with your bank.

e-debit payment is made through the FTA portal by clicking ’Pay via Bank’.

  1. Paying via bank transfer (GIBAN). A GIBAN is a unique IBAN number that is given to every taxable person and should be displayed on your FTA Portal.

Once you get your GIBAN you can then proceed to make a normal local bank transfer via your bank and add the FTA as a beneficiary using the GIBAN number and FTA Details.

Please note this option can take up to 24hrs to appear in your account.

  1. Exchanges (UAE Exchange or Al-Ansari Exchange)

It is now possible to make a payment to the FTA through a number of the exchanges in Dubai. You will require the following information:

  • TRN No
  • GIBAN Number
  • Amount Payable
  • And take some ID (always handy)

REMEMBER: In case a payment is not received on time, a penalty of late payment will apply. In order for the payment to be credited to your account by the 28th you should make the payment before by the 25th of the month (at the latest). 

For help on submitting your VAT Return, Profits Tax Consultants offer a vat submission only package for AED 2000 per quarter. Visit our website on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants.

It is possible that this information is out-of-date and you should confirm the facts by visiting the FTA Payment User Guide by clicking here.

How to register for VAT by Profits Tax Consultants

 

VAT Registration can be complex and getting it wrong could mean that your application is ‘denied’. We decided to write this article in order help applicants avoid the common errors that we have had to deal with on behalf of our clients.

About Us

Profits Tax Consultants is a tax consultancy and accounting firm based in Dubai and licensed by the DED. We provide fixed fee accounting services to businesses all over Dubai and Sharjah.  We provide free Vat Registration compliant software and we are the only firm in the UAE to provide real-time accounting services through our unique cloud accounting business model. Visit us on www.profitsplus.ae

VAT Registration – Mandatory

Ultimately if you are an existing business and in the last 12 months (no longer 2017 but till date)your sales exceeded AED 375,000 then you must register for VAT. This is considered Mandatory registration. If however your sales in the last 12 months were below AED 375,000 but above AED 187,500 then you can still register for VAT on a Voluntary basis.

Penalty Extension

Vat Registration for Businesses not registering could face a penalty of AED 20,000 as per the FTA and this deadline has now been extended to the end of April 2018. You must apply to register before this date.

Getting Started

Firstly, you need to create a user name and ID which is a very simple process and takes only 5mins. You can do that by visiting this link: https://eservices.tax.gov.ae/en-us/signup

Once registered you have to wait for the confirmation email to be sent to your email address used in the registration. Note: please do not forget your email ID and PW or security questions (and yes many people go forget).

 

Section 1 – About the applicant

Key mistakes made in this section are what to select when the trade license is a professional license? From our experience we have had no problems with selecting Legal person – Other and then entering Sole Establishment in the ‘If other, please specify’ section.

Also it is very important to select Mandatorily v’s Voluntarily. Only select Mandatorily if your past sales are over AED 375,000 otherwise always select Voluntarily.

 

Always select no to Tax Group unless you are registering for a Tax Group and this subject area will be covered in another article.

 

Section 2 – Details of the applicant

Legal entity name needs to be exact and do not worry about the Arabic as you can go to the DED website here: http://www.dubaided.ae/English/Pages/default.aspx and actually search your trade name and copy and paste the Arabic wording.

Trade License information should be exact and the rest of this section is pretty straightforward.

 

Section 3 – Contact details

A simple point to note here is that whatever contact number is entered here will  receive SMS updates from the FTA in regards to the Vat Registration matters of the company.

Section 4 – Bank Details

Bank details have not always been a mandatory requirement and in our opinion where it is voluntary I would just leave it blank. If mandatory then complete with the main bank account details used by the business.

 

Section 5 – Business Relationships (optional)

This section has always been optional and therefore we always choose not to complete this section.

 

Section 6  – About the VAT Registration

Very important section and a ‘must get right’ section. Select the closest activity as you will not always find the right activity.

Turnover is your gross sales for the last 12 months – NOT 12 months of 2017 – but the 12 months till the date of application. Upload of proof is nearly always optional and I would only use this section if you are a commercial landlord whereby you will need to upload the title deed of the commercial property.

Expect turnover in the next 30 days is provisional but try to keep it as realistic as possible and in any case is should be over AED 15,000 in order to qualify for Voluntary Registration.

Import and Export and the rest of these areas are a very technical point and not possible to discuss in this article. We may soon write an article on Import & Export and in that article we will cover this section in more detail.

For those of you who do not Import or Export then its simple NO, NO, NO, NO.

 

Section 7 – Declaration

The declaration will require you to enter all your details again and it does always ask for Proof of Authorization and in the past we have always uploaded the Visa Page of the Manager in this section as it effectively confirms that the person has a Manager Visa from the company and typically this seems to work as a POA to manage the affairs of the company.

If you are operating in the name of a local sponsor then you really need to get a Power of Authority letter drafted and signed by the sponsor giving you authority to act on behalf of the company ‘on all matters relating to VAT Accounting and the FTA’.

Section 8 – Review and Submit

I would recommend that you make a printout of the initial submission and review in detail against all IDs and make sure that it is 100% correct. This will save you weeks in time if it is submitted incorrectly.

Once submitted you must make sure that you always have access to the email ID used in the initial registration process as this is where all communication will be sent as well as the mobile number used.

The standard time is takes for the FTA to respond is 20 working days and they normally revert much sooner. Just expect that it can take up to 30 days in total.

If any amendments are required it is ideal to make them sooner than later.

That’s all from us at Profits Tax Consultants and remember we charge AED 500 to apply for your VAT Accounting although you could manage it yourself using this article. Contact us on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants.

5 Killer must have’s [small business] by Profits Tax Consultants

Starting a small business is one of the toughest things you will do in your life, so its important that you are equipped with the best tools on the market to make it as easy as possible. The following are the tools you must have when starting a small business:

  1. Lead management system, or better known as CRM. It is critical to have a practical lead management system in place. Many small businesses spend thousand’s of £££ not to mention the time investment in tracking down their first few potential clients but when they are rejected they quickly move on to the next potential and never actually keep in touch with their initial leads.

Note, that it can take weeks, months or even years to build professional trust with some clients before actually closing any form of business, therefore it is vital to stay in touch with ALL clients in the past and this can be done cost effectively from the start if a good CRM is employed.

Here are a few suggestions:

There are many more out there and you should feel free to trial each one before reaching a decision. Important: Make sure that you are happy with the Email Integration options with whichever CRM you choose. It should be easy for you to send mass emails to the database.

  1. Good smartphone with ample data package. It maybe normal for teenagers to have the latest phone but it should be mandatory for an entrepreneur.

Imagine travelling to a meeting in the City on a train and finishing late, you are travelling back around 5pm and a new client wants to have a final chat regarding the proposal you just sent and then – shock – your phone beeps it’s ‘low battery’ indicator and its all apologies thereafter.

Try your best to take a new phone and ideally one with a good data package as google maps can really help when navigating around the city looking for that new meeting point.

  1. Email on the GO and all other business things mobile. Did you know that Microsoft recently made all their MS Apps available free to download to mobile platforms. Although we do need to take a break from work it is important to be able to access critical applications on the go if the need arises. I would recommend that you at least have your business email app, linkedin and whatsapp.
  2. Dropbox or Box for data in the cloud storage. Its important to keep all your files safe from thieves and yes if they steal your laptop or you drop it then at least your data is secure. 6 months of work is priceless to you compared to your laptop. So make sure you get into a good habit of working from the cloud and storing all your files straight to the cloud.
  3. Cloud Accountant. Profits Tax Consultants are committed to providing all accounting services through Xero Cloud Accounting Software. Getting to grips with the Profit and Loss is very important to start-ups and leaving it to an accountant who will produce your accounts after 15months at the earliest is just suicide. Cloud accountants like us help our clients produce monthly management reports through real-time accounting solutions like Xero which offer invoicing and payment integrations. Visit us on profitsplus.ae to learn more about of cost effective vat accounting packages.

In my opinion these are very important and critical items for entrepreneurs. Please feel free to share your suggestions.