Sole trader - How can I decide if an accountant is worth hiring?

penguineater

Hopefully there are some accountants browsing here that can give me some insight: I'm trying to work out if I will receive any financial benefit from hiring an accountant to make it worth doing. I'm aware that I can charge the accountant fees to my business.

I am a sole trader and have been self employed since Feb 2019.

I work from home and every payment is digital, I provide digital services.

First tax return (2 months long) the majority of my income that tax year was not from my self employed work (so no free covid money for me!).

Upcoming tax return i'll be in profits and my entire income is from self employed.

I do not have a pension, the plan for my income is to put it all towards a large house deposit - i'm aware paying into a SIPP is wise, however for now a house is the priority.

I'm looking to apply for covid bounce back loan, as far as i'm aware I don't need an accountant for this - however would one be beneficial? As i'm a new business maybe I can make use of the "You can borrow between £2,000 and £50,000. Though the amount is capped at 25% of your total turnover (usually for calendar year 2019, or new businesses can estimate)."

Happy to provide more info if needed.

Thanks!

Grumpy_chap

As you have been trading since February 2019, you probably need to use your actual turnover rather than forecast turnover for calculating the amount of BBLS you could apply for.
Do you have a business bank account?  It will probably be easiest to apply to the lender that you hold your business bank account with.
You don't NEED an Accountant, but engaging one to do the annual accounts will probably be beneficial.  Measuring the financial benefit is less obvious than the peace-of-mind.  The Accountant may identify allowances you would not otherwise be aware of but there is also an indirect benefit that you can use the time that would otherwise be spent doing accounts in developing the business more productively.

Jeremy535897

Time is of the essence as far as BBLs are concerned, and I agree with Grumpy's advice. If you don't have a business bank account, you may be too late. The scheme was to close on 4 November 2020, extended to 30 November 2020.

Tonyw193

I'm not to sure about the grants but if you start earning over £85k you'll have to charge VAT, you may or may not be aware of what also is an allowable expense as self employed. An accountant would specifically be able to advise however you could easily research that. You'll also have to pay national insurance again an accountant could work that out but if you YouTube it there are people who would talk you through. It all depends how financially understanding you are. Tax returns also have a cut off date if you miss it you could be fined. I would personally have a look through a tax return and see if you understand the terminology. You can be fined for filling it out incorrectly even just a genuine mistake or by paying your tax bill late. 

Ray_Coman

It is not necessary to use an accountant to file a personal Tax return. If yo have a limited company, I would generally advise against filing for a company without any accounting background.  however as a sole trader it is possible to file without the assistance of an accountant. The sort of things an accountant can assist with include.  identification of tax savings via business expenses; acting as agent - or intermediary- between you and HMRC, this could be useful in the event of any kind of enquiry; dealing with different aspects of your Tax Return, for instance if you are both employed and self-employed, reminding about what to pay and when,  updates on tax news for instance about eligibility for furlough and grants, advising on capital expenditure, research and development costs and other factors required to grow your business, reminding about Tax Returns which are due, dealing with backdated tax, what to pay and when and answering short email queries throughout the year.

oldbikebloke

Ray_Coman said:

It is not necessary to use an accountant to file a personal Tax return. If yo have a limited company, I would generally advise against filing for a company without any accounting background.  however as a sole trader it is possible to file without the assistance of an accountant. The sort of things an accountant can assist with include.  identification of tax savings via business expenses; acting as agent - or intermediary- between you and HMRC, this could be useful in the event of any kind of enquiry; dealing with different aspects of your Tax Return, for instance if you are both employed and self-employed, reminding about what to pay and when,  updates on tax news for instance about eligibility for furlough and grants, advising on capital expenditure, research and development costs and other factors required to grow your business, reminding about Tax Returns which are due, dealing with backdated tax, what to pay and when and answering short email queries throughout the year.

fair comments
but in counterpoint as a sole trader you'd still need to know about, for example, personal use adjustments and capital allowances