Do I require an accountant for a startup?

[UK Business Directory]

Hi

Anyone here completing their own tax returns? or is hiring an accountant key when starting a new business?

Thanks

 

[Newchodge]

Are you a sole trader or limited company?

 

[UK Business Directory]

ltd company, but would be interesting to know if an accountant is required for both sole trader and ltd. Thanks

 

[makeyourbusinessbetter]

Many people complete their own tax returns every year and are happy to do so. If your business affairs are straightforward and you have the knowledge and experience of preparing accounts and tax returns, then there is no reason why you shouldn't do your own tax return.

If your business is more complex then you would be well advised to use an accountant. A good accountant can save you more money than the fees they charge. Unfortunately there are as many less good accountants as there are good ones. Do some research, chat to a few, get recommendations from people in your area. Find one you get on well with, who speaks in a way you understand and has experience in your type of business.

Before you choose an accountant, you could also get useful advice from a local business group such as the Federation of Small Businesses, Business Gateway or similar. And you will likely find a few new customers too. Win win.

Good luck

 

[Scalloway]

ltd company, but would be interesting to know if an accountant is required for both sole trader and ltd. Thanks

An accountant is not required for either. However you will be better off with one.

For a sole trader if the only accounts you need are for your self assessment tax return then you can do it for a small business on the back of an envelope. Basically add up your sales and expenditure and the difference is your profit or loss. However you may miss opportunities to save tax or risk penalties from claiming for things you shouldn't.

For a limited company an accountant is a must. The framework for preparing company accounts is complex. This forum regularly gets desperate queries from people who have tried to go it alone.

 

[The Byre]

You are living in a country with the most complex tax laws, rules, wheezes and regulations on Planet Earth. The whole of the UK is one massive exercise in how to knit fog, using taxes.

A one hour conversation with an accountant 16 years ago, has made me £120,000 better off. This was followed by similar advice over the years that has probably saved me personally as much again.

 

[cjd]

You need good relationships with all manner of professionals - HR, lwyers, accountants etc - the sooner you find the right people to help you the better.

And btw, accountants may prepare your returns but it's you that signs them - whether you use an accountant or not, it's your head on the block.

 

[SteveHa]

My response would very much depend on your level of competence. If you don't know your debits from credits, capital from revenue, debtors from creditors and balance sheet from balance ball, then you need an accountant.

If you are comfortable with double entry bookkeeping and your own tax affairs are relatively straight forward, then you may be able to get by without.

Be warned, though, not all deductions in accounts are deductions for tax purposes, and not all deductions for tax purposes are deductions in the accounts. If you get it wrong you could find yourself on the wrong side of an HMRC enquiry.

 

[Banksbroo]

I'm happy doing my personal self assesment, VAT returns etc, but wouldn't dream of attempting my limited company corporation tax return. You really need to know 100% what you are doing, as the smallest error could invite a large tax bill or even worse a full HMRC enquiry.

 

[Edd Dutton]

I received some great advice when I set up my startup (Giving Origin), grab some accounting software as soon as possible and record everything you have. Also, get in touch with an accountant early too, be honest with your situation and raise any concerns.

It's always good to keep things recorded and get some advice early on, startups usually get discounts on software meaning you'll be paying no huge sum pa for your accounting in your first year (if you keep on top of things). For me, the time spent sorting all that out myself throughout the year would be better spent working on my business.

 

[jouma]

Hi,

as you are familiar with bookkeeping then you can appoint accountant to do year end account only where you can get the befit of tax saving and pay small fee depend on your company turnover. for instance in my practice we tend save moeny and do all thier bookkeeping so we charge them as little as £ 500.

good luck

 

[FreebieBoy34]

Hi

Anyone here completing their own tax returns? or is hiring an accountant key when starting a new business?

Thanks

How big is your business? If your business is small, then maybe you can save on cost and do the accounting stuff on your own (that's if you know a bit of the basics). But if you are running a huge business, then it's a must to hire an accountant to take care of the financial side of your business...

 

[qurttlfqrq]

An accountant or a bookkeeper may help you. But why don't you try it yourself? I will advice you to hire an accountant if your business is more complex and you alone can't handle it or you don't have much time for it.

 

[stacey howard]

If you have enough knowledge, experience and time then you can fill your tax return your own.Also if you are a startup then you should hire outsourcing company for your tax return and preparation services as it would cost you less than a local accountant and you can give more time for your business growth.

 

[Plumb Spares Direct]

All good advice, but as someone above mentioned, it is YOU who signs them and are ultimately responsible for their accuracy. I got VERY stung by this years ago and have only recently recovered. We ended up paying a ridiculous corporation tax bill and HMRC were not at all interested in mistakes we subsequently found. We signed, we pay. Simple. HMRC are VERY apathetic and monotone and are not interested in sob stories etc. At the very least browse 'accounting for dummies' or similar and make sure your accountant goes through and explains important aspects of your accounts before you sign them. Be warned, once you have signed those accounts they are set in stone.

 

[Business999]

accountant will save your time and money of your startup business, i know a good accountant who charges £500 per year, all you do is you give him your bank statements and all reciepts and invoices, then he will do the rest

 

[Richard Edwards]

I would just like to say, filing your accounts for a micro-entity is easy IF YOU ARE A SIMPLE BUSINESS.

Do not get put off my accountants talking about XFBML and all manner of other terms.

If you are a Limited business, under 10 employees and under £500,000 income (at time of writing) you can file Micro Accounts AND Company Return and pay your Corp Tax all on the HMRC site in one online form - search for "File your accounts and Company Tax Return" (I cant paste the link here)

As long as you are doing good book-keeping, this is a simple input task. Use a system like Kashflow, Quickbooks, Xero, Sage etc. and you can generate reports which give you the figures to enter.

It takes about an hour to file them on that one site. HMRC then pass the accounts to companies house for you. I've done this myself for the past 2 years and saved around £1500 in accountant fee's.

IF you run a service based business this is very simple accounts. We do web design and we have very basic incomings and outgoings and few overheads. We do not have stock and have very few assets. In these cases an accountant is a cost rarely worth it - unless you get scared of book-keeping.

If you have stock of products, a lot of assets or have to handle payroll - then an accountant would be worth it if it goes beyond what you are comfortable with - in most cases an accountant is a only needed when you hit your depth limit in what you know and what you are having a 'good guess' at - this will only come back to bite you.

The other benefit of an accountant is the tips and advice on Tax and how to best reduce the tax bill (without being immoral/illegal), or how to sell assets and so on.

It does depend on your business and how happy you are with book-keeping. You look like a simple online website taking fee's and advertising, you should be able to book-keep easily enough and file your own.

 

[Edd Dutton]

It takes about an hour to file them on that one site. HMRC then pass the accounts to companies house for you. I've done this myself for the past 2 years and saved around £1500 in accountant fee's.

IF you run a service based business this is very simple accounts. We do web design and we have very basic incomings and outgoings and few overheads. We do not have stock and have very few assets. In these cases an accountant is a cost rarely worth it - unless you get scared of book-keeping.

You can do it very easily if you're a simple business, I agree, however you need to consider your time as an asset. When starting up a business you need to focus everything you can on the business itself. When I started up, I hired an accountant just so I could focus all of my time on what makes my business successful rather than how working out how HMRC does everything.

But like you said, if you know how everything works already, then that's great - you probably shouldn't bother with an accountant.

 

[Ivel]

[QUOTE="Plumb Spares Direct, post: 2708415, member: 279614. Be warned, once you have signed those accounts they are set in stone.[/QUOTE]

That is not exactly true, you can file amended account and amended tax return.

To the questions above, if you are sole trader you can try and do your own tax return. If you are a Ltd company you need an accountant. There are more complex things involved than just profit and loss account.

 

[SteveHa]

It's probably worth highlighting, tax legislation in the UK runs to more than 19,000 pages.

Just saying.

 

[Karimbo]

if your business is simple you can set up without one and then get an accountants assistance for year end stuff. However when you bring an accountant involve wont make much different to the costs because even if you bring someone in for year end, they may end up still charging you the same as if they were charging you their monthly rate during the course of the year.