A good contractor accountant

Contractor accountant / small business accountant specialist

When you start contracting, you may be moving from a regular job or from an umbrella company. As part of this process, there is a quite a lot to think about. Therefore, if you put in place an accountant from the outset, it can help guide you and set your mind at ease.

As part of running your own business, it will be quite a change from being a regular employee. 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.

Many small business owners including a sole trader, a partner in a business partnership and an owner / director of a limited company, will look to use the services of an accountant as this will help them navigate any accounting and taxes issues. The accountant for the business should be able to answer any questions that arise on an ongoing basis.

When you are setting up your own company and become a new business owner, besides opening a bank account and handling other initial tasks, you will need an accountant. If you choose a small business accountant who offers great value accountancy services, this will be a wise choice from the outset. It will also stand you in good stead going forward when you are actually running your own company from day to day.

Plenty of choice

Please note, there are plenty of accountants for small business out there. Within these, there are the ones that are a 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 that you choose should aim to help you grow your business and be knowledgeable on how 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 make sure that your company meets all of its official filing requirements, which are part of your director duties. These include legal, statutory, and financial. Their overall accountancy services package should be value for money and handle all of the tasks needed for you and your company.

They should also make sure that you do not pay any more tax than you need to.

If you are based 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 advice that you should know when you have your own business. This includes our latest advice for best tax planning ideas.

There are various filing dates that you may need to meet as both a company director and someone who files a Self-Assessment Tax Return. Although your accountant will help you meet all of these, it is handy to know yourself when you need to file the company accounts and other documents, and make the various tax payments over the course of a year.

We have also for the ease of reference, written about limited company taxes and the filing dates for official documents and tax payments.

What to watch out for   

Initial thoughts 

There is nothing worse than hiring an accountant for small business / contractor accountant who is not good at communicating with you. It is also not good to hire someone who has skills in accounting that are not up to scratch. Being late when filing official documents for your business and you are also something else to avoid.

For a stress-free time as a 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 on 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. 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, along with expert advice and there will be the option to speak with your accountant, should the need arise.

Overall, a good accountant will make sure that you do not have to worry about most of your duties. They will also look after you on a personal level too. On an ongoing basis, you are then able to focus on finding yourself suitable contract work.

More things for you to watch out for

You may have heard that there is extra `hassle’ that comes with running your own company. Indeed, this comes when you appoint yourself as a director. You have to deal with the tax and VAT offices, Companies House, and so on. It is also true that when you are a director, you do undertake to carry out certain duties each year. All legal and other duties ultimately fall with the director. However, a good accountant who is a specialist will manage most of these, in exchange for a monthly fee.

Overall, a good accountant will make sure that you do not have to worry about most of your duties. They will also look after you on a personal level too. On an ongoing basis, you are then able to focus on finding yourself suitable contract work.

Accountancy services costs 

Most accountants charge a fixed fee, payable on a monthly basis for their annual cycle of accountancy services work. However, some will apply extra fees during the year. Others will also try to charge you an extra fee if you leave them at a later date. You should, therefore, 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.

You may expect to pay between £60 and £150 per month as part of most contractor accountancy packages. The fee will cover an all-inclusive type of service for your business. The cost will include dealing with the tax and 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 some administration type tasks and general advice, including updating your company’s statutory records. Their monthly fee should also cover the preparation and filing of your personal tax return.

The number of specialist contractor accountants out there has grown at a fantastic rate over recent years. The UK contracting industry is a lucrative one. Contractors typically have relatively simple accounting needs.

Therefore, it is not surprising to see so many firms out there looking for business.

Finally, there are, of course, many reasons why a contractor may choose one accountant over another.

What to consider when you choose your new accountant

Initial considerations 

Is the contractor accountant / small business accountant a genuine specialist in the UK contracting industry?

We recommend that you hire a contractor specialist that provide the best accountancy services. They should be familiar with how contractors and freelancers operate and can look after you from the get-go. They 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. They can also let you know what you will need to do.

You should check if you will be assigned with an account manager, who will look after you each day.

It is important that you also choose qualified accountants and they should be either Certified or Chartered Accountants.

On this website there are detailed expenses guides on entertainingbusiness clothingpersonal incidental expensescompany donationsbusiness giftstrivial benefits and many other areas. These are areas that need detailed research and consideration to see what you are able to 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 more than 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 let you know how to maintain your business records and how long to store the records for. Your accountant should also make you aware that you can claim any pre trading expenditure. These are expenses that you have incurred personally, before you set up your business.

Please make sure that your accountant can prepare and file your personal tax return for you.

It is vital 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 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.

Additional considerations

Gone are now the days where you would send all of your receipts each month for your contractor 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 software must also be compliant with Making Tax Digital, if your business will be VAT registered. A popular choice here is FreeAgent, and this software is for smaller type businesses such as one-person companies.

An excellent place to start your search is to ask your colleagues for recommendations. They can advise you how their accountant deals with their affairs. What’s more, your colleagues can also let you know if they do this on time and if they are accurate with their work.

Finally, you may be new to the contracting world, and you 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, in lots of cases, 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.

Final thoughts 

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 business
  • They are competitive on the price for their work
  • They have recommendations on their social media profiles or you can also ask your contacts to help you form a good decision.

Link to Contractor Advice UK group on 

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: March 21st, 2021 / Categories: Accountant, featured, First timer guide /

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