Do i really need an accountant.

mishelly

I have just become self employed and am in the process of registering with HM Revenue and Customs.

As i am a sole trader and i do not need capital to start and i wont have many expenses coming out the accounts are really simple. Do i really need an accountant? Will they save me more money in tax than they will cost me? And will i need to fill in a tax return at the end of 2008 for the 2008 period of October - December?

Thanks in advance x

mtem74

Whether or not you need an accountant is really something only you can answer. You don't have to have one but if you feel they may be able to do your books etc.. betetr and save you the hassle then go for it.
As for filling the tax return, as you've started registering the tax office will send you the form out in April 09 for the 08/09 tax year. Thats not to say you have to have your financial year following the tax offices but sometimes it just makes things easier

allydowd

My partner is in the same situation as yourself. I went on a 20 week book-keeping course (AAT ABC Book keeping) at the local college and I keep the books. It's not terribly difficult if you have a good head for figures nad we don't pay an accountant a penny.

dunstonh

Are you able to submit your business and personal tax returns? Are you able to do your own calculations (depreciation for example) and do you know your allowances?

mishelly

Thanks everyone.

I might just give it a go on my own for this year and look into taking a short course like allydowd did.

As i said, there are not many things coming in and going out of the account which should make things easier.

Dunstonh i think i would be able to submit my business and personal tax returns yes but i am not totally up to speed on the calculations or allowances part of it.

That said it might be worth my while to see if i could find an accountant for a fixed fee who would sort out my accounts and who should let me know of anything i can claim back. I dont want to be landed with a ginormous tax bill when it could be less. Between now and April i expect to earn around £11,000 so there is a possibility for a bit of a whopping tax bill if i am not careful.

Bigdaddy

Do you really need any services, ie a gardener, plumber, a window cleaner, a mechanic etc

Its a question of freeing up your time to do what you do best (or enjoy) and leaving others to do what they are qualified or experienced to do, in the hope that they will do a better job than you, take away the hassle and leave you with more time or time to earn more elsewhere.

If anyone really sets their mind to it they can work out most things, the question is how long will it take and is it really best use of your time.

These are the questions I ask myself when doubting whether or not I should pay someone to do something I feel I can do , or work out for myself .

mishelly

Excellent analysis bigdaddy, thanks alot!

I would probably get people in if it was a really technical job that would take me ages to learn how to do (that is why i go to the hairdressers) but i wouldnt get a gardener in as i feel i could do that myself (and if it looks bad i dont have to wear the result on my head!)

So i suppose the question is which of these things accounting falls into. Hmm, i am going to have a look and do a bit of research and if it takes up too much of my time or i just cant do it then i will 'get someone in'.

Edit: Just to let you all know i found this http://www.hmrc.gov.uk/bst/work.htm There are workshops set up by hmrc to teach people how to fill out their tax returns and self assessment forms if they are self employed and how to do payroll and things if an employer and a whole host of other things. These workshops are free and for half a day. I have just asked to be put on the 'Becoming Self Employed' and the 'Self Assessment for the Self Employed' ones. I will let you know how they go.

moneypooh

Why not contact the tax office direct? My neighbour started a business 2 years ago and did just that. She was directed to a study day they held locally for start up businesses and never looked back. She always rings them for advice and now submits her tax return online. She also attended a short course and with the help of simple software like excel has everything covered. Her business has grown and when new tax situations arise she just calls her local office. She's a member of the FSB and local business link and they too give advice and help.

[Deleted User]

As i am a sole trader and i do not need capital to start and i wont have many expenses coming out the accounts are really simple. Do i really need an accountant?

My partner and I started out in business in a similar situation about 5 years ago now. At that point it just wasn't worth our while getting an accountant as we didn't earn much and it therefore simply wasn't possible for an accountant to save us enough in tax to pay his fee.

It was very straight forward to do the tax returns online. And any time you get stuck you just pick up the phone and get advice from the tax office.

I never did get around to getting an accountant. It is possible that it could now save me money, but I've just got so used to doing my accounts myself. At the end of the day you need to present the raw info to the accountant in a format that he's happy with. Chances are that would require more work from me than simply doing the whole job myself using the system that I'm comfortable with.

Our profits have steadily increased each year. It's now reaching the stage where I'm considering an accountant simply because we're paying enough tax to allow potential for a knowledgeable expert to make us some real savings.

rayw_3

If your business is a small sole trader operation, you may well be able to keep your own books. But whether you decide to use an accountant or not, the key will be keeping careful records, and making them as clear as possible.

List income and expenses, and categorize your expenses as best you can. Record a reference for each transaction next to each entry; a cheque number, invoice number, date, etc. so that every transaction can be quickly cross referenced with a) your sales invoices or the expenses invoices/receipts, and b) your bank statements. This way, not only will your books be easier to keep on top of, but if you do decide to use an accountant their fees should be lower because your records will be easy for them to follow.

Good luck with your business.