When you start contracting, you may move from a regular job or an umbrella company. As part of this process, there is quite a lot to consider. One thing for you to do is appoint an accountant. As part of this, what to look for in an accountant is an important question. As a UK contractor, if you put in place specialist contractor accountants from the outset with competitive contractor accountant fees, this can help set your mind at ease. However, how do I find a good accountant?
Many small business owners, including 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. They will help support your business, improve your cash flow, and navigate any accounting and taxes issues. The accountant for the business should be able to answer any questions that arise on an ongoing basis. In addition, as part of their accountant business advice, they should be able to help you to show tax efficiency as part of working through your own company.
As part of running your own business as a limited company contractor, this will be quite a change from being a regular employee. Indeed, this is because when you are a business owner, you will have more commitments from the outset, such as director responsibilities and dealing with business taxes.
A good contractor accountant –plenty of choices
When you set up your own company and become a new business owner, you need to appoint an accountant, besides opening a bank account and handling other initial tasks. If you choose a small business accountant or some specialist contractor accountants who offer excellent value accountancy services, this will be a wise choice from the outset. Notably, it will also stand you in good stead in the future when you are running your own company from day to day.
Please note that there are plenty of accountants for small businesses out there. Within these, there are the ones that are specialist accountancy when it comes to taking care of contractors. In an ideal world, this is where you should start your search for an accountant for your business. The accountant you choose should aim to help you grow your business and know how both business and personal taxes work. They should also be aware of the tax savings that can help both your business and you on a personal level.
A good accountant will ensure that your company meets all of its official filing requirements, which are part of your director’s duties. These include legal, statutory, and financial. Their overall accountancy services package should be value for money and handle all the tasks you and your company need.
They should also ensure you do not pay more tax than you need to.
If you work in the capital, you will find that many accountants in London are very expensive. Therefore, it is wise to look around for a good deal and someone who is a specialist in the contractor space.
Tips and recommendations
Have a read of our article covering tax tips for contractors for handy tips and accountant advice that you should know when you have your own business. This article includes our latest guidance for the best tax planning ideas.
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 and make various tax payments each year.
For ease of reference, we also have written about limited company taxes and the filing dates for official documents and tax payments.
What to look for in an accountant for contractors
There is nothing worse than hiring an accountant for a small business 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. Being late when filing 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 right accountant to look after you and your business. They should be reasonable in the price of their services and provide a dedicated accountant. It is 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 accountants, where most of the accounting and correspondence is dealt with digitally. These offer the perfect combination 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, a good accountant will ensure 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 with running your own company. Indeed, this comes when you appoint yourself as a director. You must deal with the tax and VAT offices, Companies House, etc.
It is also true that when you are a director, you undertake 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
Most accountants charge fixed contractor accountant fees, payable via standing order every month, for their annual cycle of accountancy services work. However, some will apply extra fees during the year, and others will also try to charge you an additional fee if you leave them at a later date. Therefore, 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 extras at any time.
When you appoint some specialist contractor accountants or a small business accountant, you may expect to pay contractor accountancy fixed fees between £60 and £150 per month as part of most monthly contractor accountancy packages. This fee will cover an all-inclusive type of service for your business. The cost will include dealing with the tax, VAT offices, and Companies House. It will also include running and reporting a monthly payroll, filing annual accounts and filing a company tax return. The service will also include administration-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 has grown significantly over recent years. Please note that the UK contracting industry is lucrative, and contractors 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
Initial considerations -contractor accountant
Is the contractor accountant / small business accountant a genuine specialist in the UK contracting industry?
We recommend hiring a contractor specialist who provides the best accountancy services. They should know how contractors and freelancers operate and can look after you from the get-go. Your accountant will be able to undertake the company formation 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 consideration to see what you can claim as expenses and save tax.
Further things to consider
From the outset, please find out what the accountancy charges will be. As in life, going for the cheapest option will likely not be the best service. What’s more, it is also not always true that the more that you pay, the better service you will receive. Therefore, you will need to look into this and do your 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 expenditure. Key to note, these are expenses you have incurred personally before setting up your business.
Please ensure that your accountant can prepare and file your personal tax return.
It is good to feel happy with your accountant. Peace of mind comes with having the knowledge that they are looking after your affairs competently. Indeed, this should be both for your business and for you personally. 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 recommendations on social media, i.e., on their LinkedIn profile.
Accountant 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.
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 businesses such as one-person companies.
An excellent place to start your search is to ask your colleagues for recommendations. Notably, they can advise you on how their accountant deals with their affairs. Moreover, 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 contractor 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.
If you would like to change your 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 consider when changing your accountant.
We would advise you 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. Please look for:
- A specialist that offers quality accountancy services for contractors and small businesses.
- They are competitive on the price of their work.
- They have 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