Small Biz Accountancy Costs

emv

Hi

I've decided to set up as a limited company rather than a sole trader because it will allow me to offset my childcare costs of £5k per anum against the business profits. Otherwise, I am in effect a sole trader, running classes, so my business is very simple.

I wondered what kind of costs I would be likely to pay to an accountant and any tips for minimising these costs? I will be doing as much of the accounts myself as I can.

Many thanks

Emmavix

Bean_Counter

emv wrote: »

I've decided to set up as a limited company rather than a sole trader because it will allow me to offset my childcare costs of £5k per anum against the business profits.

With all due respect, did someone who knew what they were talking about tell you this? Of course I do not know all the facts.

Regarding an accountant, a first step might be to try and identify an accountant maybe through a recommendation. Then ask the accountant how (s)he would like the books kept. The answer will depend on the complexity and frequency of your business transactions, which we do not know.

A good accountant should always be able to save you time and money.

kennyboy66_2

I am not aware that being a limited company allows you to offset childcare costs against tax - I have doubts if you can.

If you mean taking part of your pay in Childcare vouchers (£55 per week for each employee), that is a slightly different thing. If your partner was an employee they could also take part of their pay in childcare vouchers. You thus save income tax and Class 1 NI contributions.

Perhaps someone might know if you can utilise this as a sole trader rather than having to go ltd.

Bean_Counter

kennyboy66 wrote: »

I am not aware that being a limited company allows you to offset childcare costs against tax - I have doubts if you can.

If you mean taking part of your pay in Childcare vouchers (£55 per week for each employee), that is a slightly different thing. If your partner was an employee they could also take part of their pay in childcare vouchers. You thus save income tax and Class 1 NI contributions.

Perhaps someone might know if you can utilise this as a sole trader rather than having to go ltd.

We don't have anyone at work in this position, but as far as I am aware, the company administers an approved vouchers scheme. Administration costs are tax deductible. The employee still pays for the vouchers, albeit saving tax and NI in the process.

Hence you as an employee still pay for vouchers. As far as I can tell, being a sole trader or limited company makes no difference.

emv

Hi

I have checked this with the HMRC - as a sole trader, you aren't classed as an employee so aren't eligible for childcare tax breaks. But as an employee of a limited company, it's possible to be offered childcare as a benefit on top of salary & to be given £55 per week towards the cost of childcare, either as a voucher or (to save on costs) as contracted childcare, where the employer writes a standard letter to the childcare provider agreeing to fund £55 of childcare per week per employee. So my husband and I can offset £5,720 of profits against our childcare costs. I had never heard of this as being a reason to consider becoming a limited company rather than a sole trader but it's a big reason in our case.

Emmavix

ukbill69

Accountants usally charge £50 per hour + vat, if you can do your books on excel and if small, not many transactions then a good accountant can get the accounts done 10 hours or less, really all depends.

longforgotten

ukbill, £50+vat per hour... please let me know if you are talking about a qualified chartered accountant.

Treading_Water

Hi
You don't need a chartered account for the size of Ltd company being discussed here. It should be possible to get a Licensed accountant to do the job for the sort of money being discussed. The amount of time taken will depend on how well presented the information is.

longforgotten

what do you mean by 'licensed' please?

Alison_B

Have a word with an accountant. My accountant charges £300 for a small business but for someone who is a sole trader and not making much money, will charge around £150

adypem

emv wrote: »

Hi

I have checked this with the HMRC - as a sole trader, you aren't classed as an employee so aren't eligible for childcare tax breaks. But as an employee of a limited company, it's possible to be offered childcare as a benefit on top of salary & to be given £55 per week towards the cost of childcare, either as a voucher or (to save on costs) as contracted childcare, where the employer writes a standard letter to the childcare provider agreeing to fund £55 of childcare per week per employee. So my husband and I can offset £5,720 of profits against our childcare costs. I had never heard of this as being a reason to consider becoming a limited company rather than a sole trader but it's a big reason in our case.

Emmavix

I too looked at offering the childcare scheme to all employees (me), but I decided against it.
I don't think it costs the company anything in real terms, but you have to pay 8% of all vouchers to busybees, but I think you can re-coup it in tax/ni etc...

But running the scheme might add extra work for your accountant and as a result the fees could go up.

I think you need to make it publicly available to all employees. ie. put a poster up in the kitchen etc...