Would I benefit from having an accountant?
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King
Posts: 129 Forumite
in Cutting tax
Hi guys,
a quick rundown. I've an LLC company since the start of 2017.
2017/18 earnings were well below the personal allowance for taxable income.
2018/19 earnings are likely to be below the allowance too.
I'm fine filling out tax returns myself, would there be any upside to getting an accountant onboard at this stage when earnings are still this low?
Many thanks
a quick rundown. I've an LLC company since the start of 2017.
2017/18 earnings were well below the personal allowance for taxable income.
2018/19 earnings are likely to be below the allowance too.
I'm fine filling out tax returns myself, would there be any upside to getting an accountant onboard at this stage when earnings are still this low?
Many thanks
0
Comments
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Are you American? LLC is used in America, this is a UK forum and we have Ltd companies.
you talk about "earnings" yet that would normally be the word used for personal income.
Who does the company accounts and company tax return?0 -
Are you American? LLC is used in America, this is a UK forum and we have Ltd companies.
you talk about "earnings" yet that would normally be the word used for personal income.
Who does the company accounts and company tax return?
Yes you are right, it's a Ltd company in the UK.
Perhaps revenue or income is the word I'm looking for, the amount of money the company has taken in through sales.
I've managed the company accounts this far, the first return is due by the end of this year.0 -
Perhaps revenue or income is the word I'm looking for, the amount of money the company has taken in through sales.
That's got nothing to do with the personal allowance - a limited company doesn't have a tax free personal allowance. Your post isn't really clear at all. Are you meaning that you've paid out all the company profits as a wage to you?0 -
That's got nothing to do with the personal allowance - a limited company doesn't have a tax free personal allowance. Your post isn't really clear at all. Are you meaning that you've paid out all the company profits as a wage to you?
I see.
Honestly, I've been so busy building up the business that I've never offically got around to paying myself.
All the money that comes in sit's in a business account, which I dip into whenever I need to finance something for the business.0 -
Hi guys,
a quick rundown. I've an LLC company since the start of 2017.
2017/18 earnings were well below the personal allowance for taxable income.
2018/19 earnings are likely to be below the allowance too.
I'm fine filling out tax returns myself, would there be any upside to getting an accountant onboard at this stage when earnings are still this low?
To me, just about everything you've written is evidence of a fundamental lack of knowledge that it is your duty to have as a Company Director(?) dealing with the company's finances.
Get an accountant to explain to you the relationship between one entity - you - and another entity - the limited company.
Get him to explain how you can extract income from the Company.
Get him to explain the difference between Corporation Tax returns and Income Tax returns - and to test if you really are "fine" at completing both of them.
Get him to explain the difference between an Income Tax Year and the Accounting Period of a Limited Company.0 -
To me, just about everything you've written is evidence of a fundamental lack of knowledge that it is your duty to have as a Company Director(?) dealing with the company's finances.
Get an accountant to explain to you the relationship between one entity - you - and another entity - the limited company.
Get him to explain how you can extract income from the Company.
Get him to explain the difference between Corporation Tax returns and Income Tax returns - and to test if you really are "fine" at completing both of them.
Get him to explain the difference between an Income Tax Year and the Accounting Period of a Limited Company.
Thank you, looks like I have some learning to do.
Everyone has to start somewhere.0 -
ok lets start again
you are the (sole) director of a UK Ltd company and you know nothing about UK tax
a company does not have a personal allowance. A company pays corporation tax on every penny of profit it makes.
the company has 21 months from the date it first registered with companies house to produce its first set of accounts (and file them in the precise statutory format required by Companies House.)
typically (but not necessarily for the first set) the accounts will cover a 12 months period. On that basis the company must pay any corporation tax it owes within 9 months and 1 day of its accounting period end date.
the company started "in" 2017 so the clock is ticking down ....
by inference to your original reference to 17/18 that implies the company started before April 2017, so time is running out !
you may not have made much money, but what little you have will go in fines if you get this wrong.
you say you have spent the company money on financing something for the business. You need to teach yourself what is an allowable and dis-allowable cost before you can produce the profit figure with any confidence, and even attempt the CT return
so the answer to your question is, yes you will "benefit" from having an accountant, as what that may cost should turn out to be less than the fines you might end up paying.0 -
At present the combined process online for doing an HMRC corporation tax return and a Companies House annual return is quite simple for a small company and should be quite straight forward as a DIY exercise, but you clearly have a learning curve to get you fully up to speed.
What I would do (and indeed what I did when I set up my Ltd Company) was get a proper accountant to do everything for the first set of returns, learn from their process and their paperwork and copy that in year two. Make sure, though, that you follow what they are doing closely in year one, and allow plenty of time for the DIY process in year two. You may get to the stage later where it can all be done in a rush at the last moment, but you won’t get there for a year or three!0 -
Yes, Without a doubt.
Although its entirely possible to complete the required paperwork yourself an accountant will know all sorts of things you wont, and in addition to preventing you getting a fine (or worse) could very well save you a lot of money you may of otherwise given to HMRC that you didnt need to.
If you are diligent in keeping your accounts it means less work for them at the end of the year. My annual accountants bill was between £380 and £450 which included completing and filing accounts to companies house and my company and personal tax returns. Judging by how my meetings for signing off the accounts went i would confidently say the accountant more than payed for himself in saved tax.
#Edit#
I have also heard (though not sure if its a bit of a veiled sales pitch) that you are much less likely to get a HMRC investigation if your accounts are submitted by an accountant. Seems to have a logical basis so not something i would ignore. Also you can get insurance to cover any costs of an investigation. This was an extra provided by the accountant so not sure if such policies are available elsewhere.0 -
I have also heard (though not sure if its a bit of a veiled sales pitch) that you are much less likely to get a HMRC investigation if your accounts are submitted by an accountant. Seems to have a logical basis so not something i would ignore..
I had an interesting chat with HMRC, where they said the opposite. They told me that individuals were much less likely to be chasing every potential tax loophole than accountants, so the tax returns were much more likely to be taken at face value.0
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