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Recommended Accountants for IT Contractors

edited 30 November -1 at 1:00AM in Cutting Tax
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geeba88geeba88 Forumite
247 posts
edited 30 November -1 at 1:00AM in Cutting Tax
I have a newly formed limited company having recently started as an IT consultant.

I’m looking to engage the services of an accountant specialising in this area. There are plenty of adverts on contractor websites, but I’ve read there are a few sharks out there too.

Can anyone advise of good accountants in this area (or advise of any I should stay steer clear of!), also how much should I expect to pay? I’ve read figures of around £60-£100, do this sound about right?

Thanks
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Replies

  • Sully316Sully316 Forumite
    49 posts
    £60-£100 for doing what exactly ? Theres no way an accountant out there (I am one of them) would ever do a job for £60-£100 in respect of signing off a limited company set of accounts, and calculating coporation tax and personal tax return. £600 - £1000 is the right kind of ball park, not £60-£100. Just use a local firm, you dont need an IT specialist firm.
  • PennywisePennywise Forumite
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    I think the OP means £60-£100 per month, which is definately in the right ball park, although you usually have to be closer to the £100 p.m. level to get the personal attention of a qualified accountant. Usually these packages including book-keeping support, VAT returns and payroll, so they're usually a fairly comprehensive package.

    I'd strongly suggest a relatively small firm. That doesn't necessarily mean a "one man firm" (but there are plenty of excellent ones around). I'd generally avoid the national firms and large regional firms if you want to avoid being nothing more than a file number where you're treated like a sausage production line and they change your "account manager" more often than your underwear. We're a small firm and we've gained a lot of clients who've been unhappy with the national firms and from what we've seen, rightly so, and sometimes the standard of service is pathetic.

    You don't need an IT contractor specialist firm but do be wary of the more traditional (old fashioned) accountancy practices who are more likely to be more accustomed to dealing with "bricks and mortar" businesses and aren't geared up for one-man band limited companies. I should know, I've worked in several typical "High Street" chartered practices and we always hated such "one man" limited companies as they needed a lot more personal attention and support simply because unlike the more typical larger small business, they never had any in-house administrators or book-keeper and to be blunt, a business owner is seldom the right person to "do the books". I cringe when I think how much time we spent and how much we charged for fairly poor service simply because we regarded them as too much trouble as they never fitted in with our in-house way of working. How different things are now in my practice which specialises in IT contractors - with a bit of lateral thinking, we (and lots of other accountants) have turned what used to be thought of as PITA clients into successful happy-to-have and profitable clients, by using different kinds of software (more user friendly for freelancers) and by investing a lot of time and energy into "training" the client from day one thus avoiding the time consuming tasks of correcting mistakes. Now, if I had 100% freelancing IT contractor one man companies on my client list, I'd be a very happy accountant indeed!

    The big issue with IT contractors is IR35 - but really you should be working with the specialist IR35 lawyers to first determine whether you are caught by it, and secondly to negotiate your terms and working practices to get out of it - these are legal matters, not accountancy ones, so that's a job for the likes of Bouer & Cotterill, QDOS consulting, etc who are predominantly legally trained. Once you know whether or not you're caught by IR35, the accounting and tax side of things is relatively straight forward. I'd be very wary of taking advice as to whether or not you're caught by IR35 from any accountant, unless they are legally trained and are IR35 specialists.

    The optimum is IR35 advice from a legal specialist firm and then accountancy and tax advice from a relatively small, probably local firm of accountants who you feel you can get on with - as with all things, trust your instincts and choose a firm you can relate to and whose staff you feel that you like and trust. If you don't get good vibes, move along to another firm. Talk to at least 3 and choose the one you feel most comfortable with.
  • geeba88geeba88 Forumite
    247 posts
    great advice pennywise - thanks v much :beer:
  • JamesUJamesU Forumite
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    geeba88 wrote: »
    I have a newly formed limited company having recently started as an IT consultant.

    I’m looking to engage the services of an accountant specialising in this area. There are plenty of adverts on contractor websites, but I’ve read there are a few sharks out there too.

    Can anyone advise of good accountants in this area (or advise of any I should stay steer clear of!), also how much should I expect to pay? I’ve read figures of around £60-£100, do this sound about right?

    Thanks

    For a small startup you can usually find a reasonably priced book-keeper at a fixed hourly rate who will set up the structure of your accounts on a software programme and then input on say a monthly basis. Pesonally I would recommend they use Sage and you are familiar with it also, that way you have the data if you switch to DIY or to an accountant later (cheap at less than £200 for a remarkably useful platform from Amazon, and you probably still get 1yr free Sage support with it). Others may argue different software. So then you have all the data you need to produce audit trails, P/L, balance sheets, VAT returns.....it goes on. It is a piece of cake. Usual missing links are the conceptual side initially e.g. settting up director loan to company to offset for start up costs, harmonising accounting periods if possible to produce one set of accounts a year for CH and CT600 at HMRC. Then of course annual return to CH (paper excercise) and income withdrawal etc to consider. These links, and importantly, correct formating of accounts in compliance with various regulations, and what information to include, are more difficult to get right until you have been through the first cycle of reporting (e.g. CH non-audited abbreviated balance sheet and share allocations, HMRC balance sheeet and p/l account, shares, cost depreciations, share allocations etc). On a budget, a national firm such as tax assist direct will give a fixed hourly rate to clarify any difficulties in setting up your accounting structure and fill in the gaps until you are on your feet with first reporting. They are particualrly good for small businesees on a tight initial budget. Then it is plain sailing er, IT...ing.

    Alternatively go the accountant route where you will definitely be more informed on your business options and tax planning, procedures for optimal income and updates on your options depending on changes in regulations and procedures.

    £60-£100???? Monthy or a mistake? I hope you are budgeting better than this in your forward business plan! As in thread from accountant above, £600-£1000??? If it is to do the above to the first reporting stage, excellent value for money in my opinion given the potential pitfalls on the way.

    JamesU

    I am not an accountant or financial expert
  • JamesUJamesU Forumite
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    Yes, excellent appraisal Pennywise, mine from the other side of the fence.

    JamesU
  • geeba88geeba88 Forumite
    247 posts
    JamesU wrote: »

    £60-£100???? Monthy or a mistake? I hope you are budgeting better than this in your forward business plan! As in thread from accountant above, £600-£1000??? If it is to do the above to the first reporting stage, excellent value for money in my opinion given the potential pitfalls on the way.

    Just for a clarificiation - I was referring to a monthly figure!
  • JamesUJamesU Forumite
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    JamesU wrote: »
    tax assist direct will give a fixed hourly rate to /QUOTE]

    And on reading my posting, I meant tax assist accountants and not tax assist direct!

    JamesU
  • geeba88geeba88 Forumite
    247 posts
    Does anyone have experience of Crunch Accounting? They sound an interesting option:

    www.crunch.co.uk
  • PennywisePennywise Forumite
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    geeba88 wrote: »
    Does anyone have experience of Crunch Accounting? They sound an interesting option:

    www.crunch.co.uk

    Never had any dealing with them, but at least they're Chartered Accountants, so that's a good start.

    A firm I do know of who does that business model for contractors, at a much reduced cost, is Elaine at http://www.cheapaccounting.co.uk/ - she's a regular contributor to www.ukbusinessforums.co.uk and seems highly recommended over there.
  • SystemSystem Forumite
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    Pennywise wrote: »
    I'd strongly suggest a relatively small firm. That doesn't necessarily mean a "one man firm" (but there are plenty of excellent ones around). I'd generally avoid the national firms and large regional firms if you want to avoid being nothing more than a file number where you're treated like a sausage production line and they change your "account manager" more often than your underwear. We're a small firm and we've gained a lot of clients who've been unhappy with the national firms and from what we've seen, rightly so, and sometimes the standard of service is pathetic.

    I agree with Pennywise, I have used a big firm and nothing but problems. The smaller firm was much better however they charged by the minute and made mistakes when calculating bills. I've renegotiated with them a monthly fee and it's approx £115 per month.

    I wouldn't recommend SJD either!
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