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Do I need an accountant for my private limited company?

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I wanted to create an e-commerce website to try out a business idea. I setup a UK private limited company. The initial idea did not work out and so I want to temporarily scale down the running costs of the website and hosted services but I want to keep the business active as I may try something else in about a year's time. My initial idea did not generate any revenue at all and my expenses to date have been relatively small.

The biggest expense I would incur is if I had to pay for an accountant. Given:
  1. I've generated no revenue.
  2. Happy to write off the relatively small expenses out of my own personal wallet (I've kept a full record of all the expenses anyway though).
Do I need to hire an accountant? Or can I file the tax paperwork myself to keep costs to a minimum? Other than filing the yearly financial information on an annual basis with HMRC, what else would I need to do?


Replies

  • sliphisliphi Forumite
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    tallac said:
    I wanted to create an e-commerce website to try out a business idea. I setup a UK private limited company. The initial idea did not work out and so I want to temporarily scale down the running costs of the website and hosted services but I want to keep the business active as I may try something else in about a year's time. My initial idea did not generate any revenue at all and my expenses to date have been relatively small.

    The biggest expense I would incur is if I had to pay for an accountant. Given:
    1. I've generated no revenue.
    2. Happy to write off the relatively small expenses out of my own personal wallet (I've kept a full record of all the expenses anyway though).
    Do I need to hire an accountant? Or can I file the tax paperwork myself to keep costs to a minimum? Other than filing the yearly financial information on an annual basis with HMRC, what else would I need to do?


    You do not "need" one, but it sounds like you would certainly "benefit" from one, particularly one that specialises in start ups?

    e.g. how much money have you spent so far setting up the initial business that has not yet taken even a single penny?
    How do you think scaling back those costs in the future will start to generate a revenue?
    With no revenue at the moment you do not have a business.
    An accountant could review your business plans before you spend any more to assess the viability or otherwise of them.

    Once you have a viable business, an accountant can assist you in maximise your profits. In fact, most accountants will usually more than make their costs for you in the savings they can make for you, for example by maximising your tax savings, whilst you spend your valuable time getting on with what you think you can do best i.e. running your business and generating income.
  • Mistral001Mistral001 Forumite
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    If you plan to make this into a business that is profitable, then getting an accountant invoved now would be a good idea.  If you see that it is going to go nowhere, then perhaps an acccountant would be an expense that you do not need. 
  • comeandgocomeandgo Forumite
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    If you have any amount of savvy you can do it yourself.  Read up on the time lines regarding filing for Companies House and HMRC.  
  • SandtreeSandtree Forumite
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    tallac said:
    Other than filing the yearly financial information on an annual basis with HMRC, what else would I need to do?
    You answered your own question here.

    There is no legal requirement to have one but if you don't know what you are doing is a good idea. I mean there is no requirement to have a dentist either but most of us visit one than try to learn online when we have toothache. 

    Speak to a couple of firms and get an idea of how much it will be and if you can work for them. Depending on if you are needing PAYE, VAT or SA filing done or not will drive the price. Firms differ greatly on how risk adverse they are so also decide for yourself how close to the wind you want to sail. 

    Similarly be clear what you get for what you are paying... some firms are very cheap but ask any question and you get billed by the hour whereas others are fractionally more expensive and will answer Qs or do mortgage application forms etc for free.
  • Grumpy_chapGrumpy_chap Forumite
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    You don't need an Accountant but it may be prudent to choose to employ one.
    Do not look at the cost of an Accountant as an expense but as an investment.
    You are expert at doing whatever it is your e-commerce site does and you need to maximise your time available to put into the effort of building the business.
    You are not expert at doing accounts and, if you spend time doing this activity it is time you cannot spend doing what you are expert in and building your business.  Because of your non-expert status, it is likely that you would spend a disproportionately high amount of time doing the accounts rather than engaging an Accountant to do these tasks for you in a time-efficient manner.  What might take you 4 hours to do in sorting out tax, an Accountant might only take 1 hour.
    Anything where you can invest 1 unit and get a return back of 4 units is a good investment, no?
  • edited 18 July at 7:52PM
    motorguymotorguy Forumite
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    edited 18 July at 7:52PM
    You dont need one though but i find my accountant to be worth several times his fees every year for me, compared to the tax i would otherwise pay if i was doing it myself.

    Even though the company didnt make money this year, an accountant could carry over a significant loss in to your next years account and offset that years tax bill.

    You could of course work out what you can put through yourself but that could take time and a lot of effort and he will know what can be put through and what cant.


    Just because you're offended doesnt mean you're right
  • greyteam1959greyteam1959 Forumite
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    Do what you are good at & let your accountants do what they are good at.


  • inspectorperezinspectorperez Forumite
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    Other posters have already outlined the wisdom of appointing your own accountant for the company.
    If you are not ready for that, but wish to maintain your company on the register, it is quite easy to file dormant limited company accounts on an annual basis together with a corporation tax return. The format of the accounts is quite straightforward and can be done using the UK Gov online template. There will be a small annual cost of £13 for a Confirmation statement which again is a quite straightforward document completed and filed online.
    The UK gov website is very helpful and has been created in a way to allow companies to file their own documents without necessarily appointing third party accountants to undertake these tasks for them.
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