So, you need an accountant for something. Maybe to help file your Self Assessment tax return if you’re a sole trader, or to calculate your Corporation Tax if you run a limited company.
Great. What next? Before you go out and find one, there are a number of important considerations you should make before signing up with a new accountant.
Let’s go through them, starting with…
What do I need an accountant for?
You can think of an accountant as your own personal inspector – magnifying glass and all. It’s their job to carefully examine your financial records and make sure everything is tip-top and in compliance with the relevant tax laws and regulations.
Basically, they’ll keep you on track, helping you to minimise your tax bill where possible. They’ll also make sure you don’t miss anything, reducing the risk of HMRC penalties (which can prove costly).
On top of all this, an accountant can help you:
- Improve your cash flow
- Manage business debt
- Budget properly
- Develop a business strategy
Do I need to hire an accountant permanently?
The honest answer is not necessarily – although that doesn’t mean you shouldn’t.
It’s highly recommended that people seek expert help when it comes to dealing with HMRC, and access to ongoing advice is one of the main benefits of having an accountant in the first place. (You never know when you’ll suddenly find yourself with a burning question.)
Still, most accountants offer a wide variety of packages and services, and so you can hire one on a shorter-term basis if you prefer.
One thing to note is that fees vary from accountant to accountant, with some accounting firms charging extra for any time spent answering queries. Others charge a fixed flat rate which includes ongoing support as part of the service.
If you’re a start-up or freelancer who’s new to the world of taxes, you’d likely benefit from spending as much time as possible with your accountant, and so, with this in mind, you might want to consider going with a remote-based service (as opposed to a local one). This is because online accountants tend to be much more accessible and easier to communicate with.
It’s also easy enough to change accountants if you’re not happy, so don’t worry about feeling trapped.
Can I hire an accountant on an ad hoc basis?
Again, this is perfectly possible if it’s what you want to do.
For example, most accounting firms charge between £150 and £300 for a standalone Self-Assessment service – and something like this could be all you need (for now).
But what happens if you need them again in a couple of months because you want to change the way your business is set up? And then again a short while after that, to ask about the best way to pay yourself?
The costs can really start to mount up, and this is precisely why accountants make it more cost-effective to stay with them long-term. It’s similar to renting every movie you want to watch or just subscribing to Netflix and paying a small monthly fee.
Can I do my tax returns myself?
In a word, yes. There aren’t any rules against doing so, as long as you know what to do and when.
For example, anyone who needs to submit a Self Assessment must first register with HMRC, and the process you use to do this depends on why you need to submit one.
HMRC will send you your Unique Taxpayer Reference (UTR), which you’ll need each time you submit your tax return – usually online.
So, yes, you can technically do your tax return yourself – but do you really want to?
An accountant can help simplify the whole process, ensuring you claim any tax relief or allowances available to you and also saving you precious time. It’s up to you what you decide to do with it!
Whether you ultimately choose to go it alone or not, good bookkeeping is essential.
How do I find an accountant?
You first need to decide if you’d prefer an online or a local accountant.
Online accountants tend to have better response times, with their local counterparts prioritising face-to-face meetings. Some people want to feel like they have a kind of personal relationship with their accountant, while others just want their questions answered in a timely fashion.
You should also consider what your business type is, as while there are just general accountants, there are also those who specialise in specific sectors. Examples include Landlord Accountants and Charity and Not for Profit Accountants.
In terms of actually finding an accountant, you can do this by searching online (even if you want to go the local route) and comparing accountancy packages.
To save you time, we’ve compared a number of high-profile online accountants and the packages they offer.
Visit our accounting support hub for more help, and to ask a free tax question!
