Do I need an accountant?

willyboy104

I've registered as a limited company, and I've just applied to become VAT registered.

I am not currently paying myself a wage, although I will setup PAYE soon, and I've not really got much idea in regards to what I need to do from a HMRC / Corporate Tax & VAT point of view to ensure I am up to date and organised on the book keeping side.

If so, where do I find an affordable accountant?

Pennywise

There's no LEGAL need for most limited companies to use an accountant. But most do just to make sure they get it all right and to help avoid hefty penalties for getting things wrong or being late with submissions, or the risk of missing tax planning opportunities meaning you pay more tax than you needed to.

In the same vein, some people have their car brakes repaired by the garage and pay, some people try to do it themselves by buying the tools and spending time researching how to do it, and others just ignore the problem and continue driving. You can use an accountant for peace of mind, or you can spend the time researching it yourself, or you can stick your head in the sand and wait for the penalties! It's up to you! Not having an accountant is like either ignoring your car brakes or doing the repairs yourself - you take the risk and have to accept the consequences!

As for finding an accountant, best to get personal recommendation from family, friends or colleagues who actually use one themselves. Don't rely on recommendations from anonymous internet forums or people who don't use them themselves who may just be getting referral fees (usually bank advisors, solicitors, recruitment consultants etc). Remember that literally ANYONE can call themselves an accountant and operate an accountancy practice - it's not a protected profession so beware. If you don't have anyone to recommend one to you, then you'll have to do some research, talk to a few to get quotes and details of their services etc., but try to watch out for properly qualified ones who will have insurance, regulatory bodies etc in case things go wrong, best to look for the word "chartered", i.e. Smith & Co, Chartered Certified Accountants who are qualified, insured and regulated, and not Smith & Co, Accountants who could be a bricklayer who's just started up an accountancy practice with no insurance, no regulatory bodies and may not even have the faintest clue about accounts and tax!

martinsurrey

Pennywise is spot on.

I'll highlight the point about qualifications.

Unlike solicitors, the term accountant is not regulated, anyone can call themselves an accountant. However only members of certain accountancy bodies can use the term Chartered (Such as members of the Institute of Chartered Accountants Of England and Wales "ICAEW").

They have to abide by the rules, regulations and standards of which ever body they are a memeber.

AbbieCadabra

did you take any advice before going down the Ltd. route? will it be beneficial tax wise, taking into account probable accountancy fees? you need to fully understand your responsibilities as a company director & be fully aware of filing requirements/timescales. company accounts are not overly straight forward & it's usually recommended to get an accountant, i'm sure that you need specific software to even file the accounts online.

we pay around £650 inc vat per year for an online accountant, that's for annual accounts, corporation tax & our 2 personal tax returns. i do all book-keeping, wages/PAYE,vat & annual return. it works for us & we're very happy with the service & advice.

sofiar

affordable accountant? Not 2 words I would see together in the same sentence!

*~Zephyr~*

AbbieCadabra wrote: »

i'm sure that you need specific software to even file the accounts online.

You don't. Accounts are filed online much the same as Self Assessment returns. However, Corporation Tax Returns are not designed for the man-on-the-street to complete. They have not been simplified and made user-friendly like Self Assessment has. SA is a doddle and takes 10 minutes - the Corporation Tax form is an absolute PITA to complete and if you don't understand how a set of accounts works you can get yourself in a right pickle.

AbbieCadabra wrote: »

we pay around £650 inc vat per year for an online accountant, that's for annual accounts, corporation tax & our 2 personal tax returns. i do all book-keeping, wages/PAYE,vat & annual return. it works for us & we're very happy with the service & advice.

£650 is a good price!!

OP if you can find a decent service like the one above then you'd be well advised to take it.

AbbieCadabra

*~Zephyr~* wrote: »

You don't. Accounts are filed online much the same as Self Assessment returns. However, Corporation Tax Returns are not designed for the man-on-the-street to complete. They have not been simplified and made user-friendly like Self Assessment has. SA is a doddle and takes 10 minutes - the Corporation Tax form is an absolute PITA to complete and if you don't understand how a set of accounts works you can get yourself in a right pickle.

i knew 'something' needed specific software or was more complicated, thanks for the clarification

willyboy104

Thanks everyone for the replies so far.

I did research what route would be best for my business and decided that a limited company would be the best based on my salary, dividends and corporate tax.

However, I am trying to be smart and get all of this accounting stuff sorted out before it's too late and I am as some of you put it "in a pickle".

I will begin asking friends and family, but could I ask what it is I need exactly?

I know that sounds sort of silly, but I am guessing:

- Book Keeping
- PAYE
- Corporation Tax
- VAT registration
- Dividends

These are the things they'd take care of for me?

*~Zephyr~*

- Book Keeping - Do this yourself. Be neat, methodical and keep all receipt. The more you can do yourself the cheaper your Accountants bill will be. Spreadsheets are sufficient.

- PAYE - Do this yourself, but do it properly. If you don't want to buy a payroll package like Sage, use HMRC's Basic Tools which includes RTI processes

- Corporation Tax - Leave this to the Accountant. If it's wrong, it will cost you. Use their PI Insurance!

- VAT registration - Don't register until your turnover hits £82,000 per year. Again, this can be done yourself, but your book keeping needs to be good to make the job possible. I've happily drawn a VAT return from well administrated spreadsheets.

- Dividends - Dividends can only be drawn from profit AFTER the Corporation tax liability has been calculated. If your sums have indicated that this is still the most tax efficient way of paying yourself then your Accountant is the best one to advise you how to proceed.

Aquamania

You need someone who can help you with running your new business. So find a couple of locally recommended people who will do that (and can demonstrate that ability) and go and have a chat with them, to decide who would ultimately be best to assist you.

They may call themselves book-keepers (in which case, if they can provide the assistence you need, they are probably under-selling themselves) or accountants.

You don't need a chartered accountant, but be aware of all the above comments ... and the fact most chartered accountants will charge you more because of this.

(You would need a chartered accountant to sign off audited accounts, but most small businesses are permitted exemption from supplying audited accounts)

Pennywise

*~Zephyr~* wrote: »

You don't. Accounts are filed online much the same as Self Assessment returns. However, Corporation Tax Returns are not designed for the man-on-the-street to complete. They have not been simplified and made user-friendly like Self Assessment has. SA is a doddle and takes 10 minutes - the Corporation Tax form is an absolute PITA to complete and if you don't understand how a set of accounts works you can get yourself in a right pickle.

Whilst your general sentiments are sound, the reality is that the CT return itself is remarkably simple to complete, as are the submissions needed to be sent to Co House.

BUT, both rely on a properly prepared set of accounts, prepared under double entry book-keeping methodology with proper provision made for stocks, depreciation, tax liabilities etc. If you have a proper set of accounts, then all the figures are dead easy to pop into the online HMRC and Co House submission systems.

Where people hit the brick wall is usually that they don't have a proper, balanced set of company accounts, so try to make it up as they go through the CT return and Co House online submission form boxes, which then inevitably doesn't balance, and things go downhill from then on.

For my clients, typical timings are 2-3 hours preparing the accounts and then just about half an hour putting the figures into the CT and Co House online submission form boxes.