Limited Company Accountants
Navigating the intricate landscape of self-employment is no easy feat, especially for contractors. Amidst the myriad of regulations, one term stands out prominently: Limited Companies. But how can limited company accountants help you run your business?
Whether you’ve recently incorporated or have been managing your finances independently, hiring a limited company accountant may be one of the best things you can do to help you run your business. But is it a legal requirement to have an accountant? What benefits do they bring, and what are the costs involved?
In this comprehensive guide, we delve deep into the heart of limited companies. Whether you’re an aspiring contractor or a seasoned veteran seeking clarity, this guide aims to empower you with the knowledge to make informed decisions.
Benefits of Limited Company Accountants
There are many benefits of making use of a contractor accountant:
i) Tax Efficiency
A limited company accountant can help you structure your salary and dividends to minimise your tax burden.
ii) Advice
A limited company accountant will advise how best to run your company. For example, they advise you on the allowable expenses that HMRC lets you offset against corporation tax. This often results in a lower tax liability than if you forego the accountant and do it yourself.
iv) Reduce The Risk Of Errors
A limited company accountant will significantly reduce the risk of mistakes made on statutory filings or missed deadlines.
iv) Save Time
A limited company accountant will handle the time-consuming financial responsibilities of running a limited company.
An accountant can incorporate your business, perform day-to-day bookkeeping, manage payroll, produce your returns, and submit the necessary paperwork to HMRC and Companies House.
Cost Of An Accountant
The cost of an accountant can vary greatly depending on the size of your business and the types of services you need. An accountant performing payroll services for ten employees will cost more than an accountant servicing a single director/employee personal services company.
For contractors operating as sole director/owner, the average cost of an accountant is between £100 and £150 (+VAT) per month.
Choosing An Accountant
There is no prescribed methodology for choosing a contractor accountant.
Before signing up, we recommend searching for reviews of the accountancy service by typing “accountant name” + “reviews” into Google. You will be able to read about the experiences other contractors have had when dealing with them.
If nothing comes up, it shows that they are not a very widely used service. This doesn’t necessarily indicate a red flag, although I would urge extra caution.
Do Company Accounts Have To Be Done By An accountant?
Despite the strengths an accountant may bring to your business, there is no legal requirement to employ their services. Just as there is no legal requirement to have an accountant, no legal restriction stops anyone from performing their work. If you are confident in your ability to deal with your finances, you can meet all your statutory reporting responsibilities yourself.
That said, there are risks involved in performing accounting tasks for which you have no specific training. It is easy to go wrong or to miss a deadline, mistakes that can result in significant penalties and fines if not caught promptly.
Accountants provide a specific skill set, experience, and knowledge of how to run a business from a financial perspective.