Published on July 17th, 2014 | by Falcon0
What to look for in a Accountant
Few contractors when they are starting out put finding a good accountant at the top of their list. Most will later realise it is one of the most important things they can do. A really good accountant can make contracting so much easier and so much more lucrative just by knowing their way around the ins and outs of taxation. If you’re not interested in A specialist contractor accountant will not only save you time – by handling your accounts and freeing you up to work more- they will also keep you on the good side of HMRC, avoiding any careless mistakes which mean you might pay too little in tax (and get caught) or worse, pay more than you need to in tax. Any accountant worth their salt will be fully up to date with all the latest legislation on limited companies, umbrella companies, offshore companies, delayed payment schemes and most particularly, IR35. And by doing so, a good accountant will more than cover the cost of their own fees by increasing your take home pay and minimising your tax burden. This article will offer a brief guide on how to choose a good accountant:
When Should I Get A Accountant?
In an ideal world you would get an accountant before you start business. That way they can set up their income structure in the right way from the start and get their books organised exactly how they should be from day one. Additionally a really good accountant will take care of the company formation on your behalf and would get you registered with HMRC before you even start. In some cases you may not need to use a accountant there are some brilliant services like Clever PAYE that provide you with all the tools and support you need to run your business.
That’s All Very Well But I Have Been in business for Years!
No problem. It’s never too late to start over and get yourself a new accountant. If you’ve had doubts about the abilities of your current accountant or just want to find someone who can squeeze that bit more out of HMRC’s rules and regulations then make the change straight away. This is particularly true if up till now you have been working with a regular accountant and want to change over to a specialist contractor accountant. Don’t worry about how much hassle it might be – a good accountant will be able to handle the transfer for you without any problems. All you need to do is a bit of research into accountants in your area (or online) and choose three or four to call.
Make Sure You Check Their Credentials.
As with any financial advisor the first thing you need to do is check they are fully qualified and that they are registered with one of the main regulatory accounting bodies in the UK such as the Institute of Chartered Accountants, the Association of Chartered Certified Accountants or the Chartered Institute of Management Accountants. Once you have done that do some research online to see if people have reviewed them or talked about them in forums.
Then Find Out How Much of a Specialist They Are.
This is where you really want to do your research. Your main aim in this process is to find a accountant who has spent their last five or six years working solely in the contracting sector and who knows every last line of legislation about contractor tax. You need to find someone who can analyse your company’s needs and tell you the very best option when it comes to starting the company, paying you out of the company and staying within the letter of the law, particularly when it comes to IR35. Phone and chat to five or six accountants you like the look of and get a feel of how much they know about umbrella companies, IR35, disguised employment and managed service companies. Indeed, ask them about MSC’s and see of they warn you off them. Everyone knows that HMRC has been cracking down on MSC’s for years – if they don’t tell you to steer clear of them it is worth moving on to the next accountant!
Location, Location, Location
This will depend on whether you are happy with an accountant on the phone and online or whether you prefer to meet up with them face to face. A lot of people prefer the personal experience when it comes to talking about their tax and income and if you are like this then you would be best served looking for a contractor accountant in your area (or at least just a train ride away). For everyone else there are some very good firms now operating online and by phone who are very reasonable and offer a wealth of specialist contractor experience. If you are happy with this type of account then make sure you choose one with a dedicated account manager who will always be there to take your calls – someone you can develop a rapport with – rather than being passed around whoever is in their office on that day.
And lastly of course, there are the fees. Most accountants will charge roughly the same sort of fees; if you find someone that is much cheaper or much more expensive than the others you need to ask why. As a rule of thumb the online / phone companies will probably be slightly cheaper than a specialist in your neighbourhood (because you are paying for that personal service) and specialist contractor accountants will be more expensive than a regular accountant because they are, well, specialists. Steer clear of any companies who want you to pay entrance or exit fees for their services or who want to charge a fee according to how much you are earning. Instead, opt for an accountant who has a fixed fee covering everything from dealing with HMRC and your end of year accounts to processing your VAT and PAYE, NIC and most importantly, issues of compliance. If you can find a good contractor accountant who will also handle all of your personal taxation at the same time then grab them with both hands and don’t let go!