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When you start contracting, you may move from a regular job or an umbrella company into a contract role. As part of this process, there is quite a lot for you to think about. One of the first things for you to do is appoint an accountant. As part of this, what to look for in an accountant is a key question. As a UK contractor, if you put in place specialist contractor accountants from the outset with value for money IT contractor accountant fees, this can help set your mind at ease. However, how do I find a good accountant with competitive limited company accountants fees?
A further thought in respect of accounting for contractors is you may wonder do I need accounting services as a contractor? The answer here is yes, unless you know how to prepare accounts and do all the official filing. In addition, you would also need extensive knowledge in the accountancy arena to get by. Key to note, in most cases it is best practice to appoint an accountant who are both contractor bookkeepers and accountants in one. A contractor specialist who can also give accountant business advice when needed, will be a good choice for your business.
Initial thoughts -accounting services for contractors
Many small business owners, such as sole traders, a partner in a business partnership and an owner/director of a limited company, will look to use the services of an accountant. As
part of this, they will help you:
- Support your business.
- Improve your cash flow.
- Navigate any accounting and taxes issues.
The accountant for your business should be able to answer any questions that arise on an ongoing basis. In addition, as part of their business advice, they should be able to help you to be tax-efficient as part of working through your own company.
When you run your own business as a limited company contractor, this will be quite a change from being a regular employee. Indeed, this is due to the fact that when you are a business owner, you will have more commitments from the outset. These will include your director duties and dealing with business taxes. Therefore, let us now look into the best ways of finding a good accountant as a contractor or small business.
A good accountant for contractors -how to find a good accountant (UK)
Let’s consider now what we should think about when we look at how to find a good accountant for small business? Key to note, when you set up your own company and become a new business owner, you need to appoint an accountant. Please note, this task is in addition to opening a company bank account and handling other initial tasks. Therefore, when we consider what to look for in an accountant, where do you start?
If you choose a small business accountant or some specialist contractor accountants who offer great value for money services, this will be a wise choice from the outset. Please note, it will stand you in good stead when they provide good service in return for their small business accountant fees. As a result, this will ensure you have good backup in the future. This is key when you run your own company from day to day.
Contractor accountant -lots of choice
Please note that there are lots of good accountants for small businesses out there. Within these, there are the ones that are the specialist contractor accountants when it comes to accountancy for contractors. In an ideal world, this is where you should start your search for an accountant. Please note, the one that you choose should aim to help you grow your business. In addition, they should know how both business and personal taxes work. The specialist accountant should also be aware of how to make tax savings. Such tax savings will be in terms of both your business and you on a personal level.
A good accountant will make sure that your company meets all of its official filing duties. Please note, these are part of your director’s duties. These will include legal, statutory, and financial duties. Their overall contractor accountancy services package should be value for money. What’s more, it will handle all the tasks you and your company need. Key to note, they should also make sure you do not pay more tax than you need to.
Accountancy tips and further thoughts
Please have a read of our article which covers tax tips for limited company contractors for some handy tips and accountant advice. This will give you lots of great tips which you should know when you have your own business. Please note, the article includes our latest guidance for the best tax planning ideas.
Key to note, you must meet various filing dates as a company director and someone who files a Self-Assessment Tax Return. Although your accountant will help you meet all these, it is handy to know when to file the company accounts and other documents. What’s more, it is also key to know when to make the various tax payments each year.
For ease of reference, we also have written about limited company taxes. We also have a guide on the filing dates for official documents and tax payments. These are all also lots of other good and useful reads for a UK business owner.
If you work in the capital, you will find that many contractor accountants in London are very expensive in terms of their fees. Indeed, many UK contractors in the capital will search for `IT contractor accountants London’ however in general many will be quite costly. Therefore, as an alternative to doing a search for a `contractor accountant (London)’, it is wise to look around for a good deal. As part of this, you can look for someone who is a specialist in the contractor space and offers a value for money service.
What to look for in an accountant for contractors
When you investigate what to look for in an accountant, there is nothing worse than hiring someone who is not good at communicating with you. It is also not good to hire someone with skills in accounting that are not up to scratch. What’s more, being late when they file official documents for your business and you personally is also something else to avoid.
For a stress-free time as a limited company contractor, you should check the current market and aim to find the best contractor accountants to look after you and your business. They should be reasonable in the price of their services and provide a dedicated contractor limited company accountant. Please note, it is also better to have one person to deal with your affairs rather than various employees of the same accountancy practice. In addition, it will also be good to know if they will offer face-to-face meetings, should the need arise.
Many contractors now use the services of online contractor accountants, where most of the accounting and correspondence is dealt with digitally. These offer the perfect mix of some simple accounting software and expert accountancy advice, and there will be the option to speak with your accountant should the need arise.
Overall, the best accountants for contractors will make sure you do not have to worry about most of your duties. They will look after you on a personal level too. On an ongoing basis, you can then focus on finding suitable contract work.
More things for you to watch out for
You may have heard that extra `hassle’ comes when you run your own company. Indeed, this comes when you appoint yourself as a director as you must deal with the tax and VAT offices, Companies House, etc.
It is also true that when you are a director, you undertake to adhere to certain duties each year. These will include all legal and other responsibilities. However, a good specialist accountant will manage most of these in exchange for a monthly fee.
A good accountant for contractors –accountancy services costs
How much does a contractor accountant cost? Most accountants charge fixed IT contractor accountant fees, payable via standing order every month, for their annual cycle of IT contractor accountancy services work. However, some will apply extra IT contractor accountant fees during the year. Others will also try to charge you an extra fee if you leave them at a later date. As a result, you should make sure that you know what your monthly charges cover and it is also good to be aware if there will be any extra IT contractor accountant fees at any time.
When you appoint some specialist contractor accountants, you may expect to pay contractor accountancy fixed fees between £60 and £150 per month as part of most monthly contractor accountancy packages. This IT contractor accountant fees package will cover an all-inclusive type of service for your business. The cost of accountant for IT contractors will include dealing with the tax, VAT offices, and Companies House. The IT contractor accountant fees will also include running and reporting a monthly payroll, filing annual accounts and filing a company tax return. The service will also include admin-type tasks and general advice, including updating your company’s statutory records. Their monthly fee should also cover preparing and filing your personal tax return.
The number of specialist contractor accountants out there has grown a great deal over recent years. Please note that the UK contracting industry is lucrative, and contractors will typically have relatively simple accounting needs. Therefore, it is not surprising to see many accounting firms looking for new business. Finally, there are many reasons why a contractor may choose one accountant over another.
What to consider when you choose your new accountant
Is the accountant for contractors / small business accountant a genuine specialist in the UK contracting industry?
We recommend hiring a good contractor accountant specialist who provides the best services. Your accountant should know how UK contractors and freelancers operate and can look after you from the get-go. They will be able to undertake the company setup process for you and advise you from the outset. The accountant will be able to let you know what they will do, and they can also let you know what you will need to do.
You should check if you will be assigned an account manager who will look after you daily.
It is essential that you also choose qualified accountants and they should be either Certified or Chartered Accountants.
This website contains detailed expense guides on entertaining, business clothing, personal incidental expenses, company donations, business gifts, trivial benefits and many other areas. These areas need careful research and thought on to see what you can claim as expenses and save tax.
Further things to think about with regard to your contractor accountant
From the outset, please find out what the accountancy fees will be. As in life, going for the cheapest option will likely not be the best contractor accountant service. What is more, it is also not always true that the more that you pay, the better IT contractor accounting service you will receive. Therefore, you will need to look into this and do your own research here.
A good accountant will tell you how to maintain your business records and how long to store the records. Please note that they should also inform you that you can claim any pre-trading expenses. Key to note, these are expenses you will have incurred personally before you set up your business.
Please make sure that your accountant can prepare and file your personal tax return.
It is good to feel happy with your accountant. Peace of mind comes when you have the knowledge that they are looking after your affairs properly. Indeed, this should be both for your business and for you on a personal basis. Key to note, they should also be doing things correctly and before any respective deadlines.
Please make sure that you check if the accountant for a small business has a good reputation. You can do this by looking to see if they have contractor accountant recommendations on social media, i.e., on their LinkedIn profile.
Accounting for contractors -additional considerations
Gone are the days when you would send all your monthly receipts for your accountant to process. If you are going to be a VAT-registered business, you need an accountant that uses specialist software so that you can file your VAT returns online.
The bookkeeping software must also comply with Making Tax Digital if your business will be VAT registered. A popular choice here is FreeAgent, and this software is for smaller types of business such as a one-person company.
A great place to start your search is to ask your colleagues for contractor recommendations. Please note, they can advise you on how their accountant deals with their affairs. What’s more, your colleagues can also let you know if they do this on time and are accurate with their work.
Finally, you may be new to the contracting world and do not have any colleagues to ask for help. Your recruitment agency may also be trying to encourage you to join a large contractor accountancy firm. There is often a ‘preferred supplier’ relationship between recruiters and some accountants. In this instance, the agent receives some ‘commission’ for every contractor that they sign up.
What to do if you would like to change your contractor accountant
If you already have an accountant and decide for yourself that you would like to change, the best time to do this is at the start of your new financial year. We have written about the things to think about when you change your accountant.
We have considered in detail what to look for in an accountant, as a UK contractor or small business owner. When you search for an accountant for contactors, it is best not to rush into deciding on the spot. Please do your research and take your time to look into what is on offer out there. Therefore, please look for:
- A specialist that will offer quality accountancy services for contractors and small businesses.
- They are value for money on the price of their work.
- They have good recommendations on their social media profiles, or you can ask your contacts to help you make a good decision.
Link to Contractor Advice UK group on
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