There are lots of considerations to make, and so, naturally, it’s easy to overlook things. One thing you may have overlooked is whether or not you would benefit from hiring an accountant.

To help you decide, we’ll break down the process of becoming a sole trader, your legal responsibilities, and how an accountant might help.

What is a sole trader?

Let’s start with the basics. A sole trader is just someone who runs their own business as an individual.

There’s no legal distinction between you and the business with this type of structure, so you’re personally liable for anything that happens. This is both good and bad – depending on your circumstances.

Considerations about being a sole trader

On the one hand, your personal assets might be at risk if the business struggles because there’s no distinction beween you and your work. On the other, you get to keep any profits for yourself once you’ve paid income tax and National Insurance. But, you’ll be taxed on them even if you leave them in the business.

It’s relatively easy to get yourself set up as a sole trader, with fewer rules and paperwork than if you were to use a different business structure.

Do I need to set up as a sole trader?

It depends! If you earn less than the Trading Allowance (£1,000) in self-employed income, you might not need to tell HMRC or pay tax on this. You can claim the Trading Allowance even if you have other sources of income, too.

If you do need to set up a sole trader business, make sure you inform HMRC by 5th October in your second tax year. A tax year runs from 6th April to 5th April the following year.

How do I pay tax as a sole trader?

Right, so… You’ve set up as a sole trader and you get more than £1,000 of trading income in a tax year. Now what?

Well, you’ll need to start submitting tax returns to HMRC so you can pay income tax and National Insurance on the profit you make.

What sort of tax return do sole traders need?

This depends on how much you make in total from self-employment and/or property income in a tax year. You’ll normally start by submitting Self Assessment tax returns.

Over time, you might also need to consider Making Tax Digital (MTD) Income Tax. As it continues to roll out, MTD Income Tax will gradually replace Self Assessment for some people.

Those affected will need to keep their income tax records digitally, and share this information with HMRC on a more frequent basis using compliant software.

• You’ll use MTD to report your tax from April 2026 if you earned more than £50,000 as a sole trader and/or rental income in the 2024/25 tax year
• In April 2027, the earnings threshold to start complying reduces to £30,000 earned in the 2025/26 tax year
• From April 2028, it’s £20,000 for the previous tax year

How do I make a tax payment?

HMRC will calculate your tax bill once you submit your return. There are many methods you can use to pay, including HMRC online, Direct Debit or bank transfer. If you work for an employer and have a sole trader business on the side, you may be able to pay your self-employed tax bill through your PAYE tax code.

The deadline to pay is 31st January each year (the same as the deadline to submit your tax return for the year). If your tax bill exceeds £1,000, you’ll need to make ‘Payment on Accounts’ – which essentially splits your tax bill in two halves. The second tax payment deadline is 31st July.

What are my other responsibilities?

You want to . This will be essential in helping you fill out your tax return, and will also help you to claim tax relief without forgetting about any allowable expenses.

Do I need an accountant?

Having an accountant can be extremeley reassuring. They’ll:

• Help you set up processes for keeping clear, up-to-date financial records – known as bookkeeping
• Advise how to optimise any tax reliefs and allowances, and make sure you’re claiming any allowable expenses
• Suggest software you can use for bookkeeping, or for MTD compliance if this applies to you

There are lots of different types of accountancy services available, so take your time to understand exactly what sort of support you need, and make sure your accountant is appropriately qualified.

Find more help in our online accounting hub, and learn more about how to find the right accountant for your business.

The post Do Sole Traders Need an Accountant? appeared first on The Cheap Accountants.

The cost-saving benefits of an either/or approach needs no clarification – only having to pay for one resource reduces your outgoings. It’s that simple, and it’s easy to see why this might seem like an attractive solution. But to make a good decision for your business, it’s useful to understand how bookkeeping and accounting are different, and what purpose each serves.

What is the difference between accountancy and bookkeeping?

Although bookkeeping and accounting both deal with a business’s finances, they do so in different ways. A simple way to look at it is like this: bookkeeping is just that – keeping the books up to date. Accountancy is about analysing, understanding, and reporting on this data.

What a bookkeeper does

Bookkeeping is the process of recording financial transactions and maintaining accurate business accounts. These are the cold, hard, numerical facts about what comes in and goes out of your business. It’s essentially the preliminary admin necessary for an accountant to do their job.

What an accountant does

An accountant will use the information which the bookkeeper records to improve the tax-efficiency of a business and support its financial health. They can help business owners make more money-savvy decisions, whilst ensuring everything is compliant for HMRC.

Can bookkeeping software replace an accountant?

The answer to this question largely depends on what you rely on your accountant to do for you. If you only enlist them to carry out financial admin and prepare your annual tax return then yes, in theory, you could do it all yourself using bookkeeping software.

However, if you were to really wring all possible potential out of your accountant’s expertise, you might find the answer to this question is a hard no.

Make no mistake, using bookkeeping software has an enormous number of benefits, including:

• Keeping all of your financial information in one place, improving access and organisation
• Remote access for multiple users when you choose a cloud-based bookkeeping software
• Using software that includes active error detection reduces the risk of mistakes in your records
• Save time on data-entry by connecting payment feeds directly to the software
• Automated reminders so you’re less likely to miss a deadline
• Minimising the risk of omission and human error

But bookkeeping software doesn’t have an accountant’s ability to spot areas where you can become more efficient in the way you run your business, or in the way that you pay tax. If you were truly working effectively with your accountant, you wouldn’t even consider sidestepping them for software alone.

If you can afford it, tapping into both resources simultaneously can help you more effectively as a business owner.

The benefits of having an accountant and bookkeeping software

We’ve touched on a few of the most common benefits of investing in great bookkeeping software above. But why do we recommend you still consider using an accountant as well? Ideally, the bookkeeping software you use will complement the work an accountant does for you.

Professional data analysis and insights

With access to accurate financial records (courtesy of excellent bookkeeping), an accountant will be able to dig into the data of your business accounts and offer insights accordingly.

Good bookkeeping software will have a range of comprehensive reports included, but if you’re not very experienced then you might find an accountant can help make sense of it all. These types of insights could be the difference between making your first million or operating at a loss for the next five years.

Better business decisions

An accountant will be able to provide you with valuable decision-making guidance by applying their expert risk analysis, financial forecasting and budget advice. Remember too, they see behind the scenes of a lot of other businesses!

Improved cash flow health

When you have professional data analysis, audits, risk analysis, and forecasting on your side, it stands your cash flow in great stead. Not only will this positively impact your current cash flow situation, you can also work with your accountant to plan ahead, mitigate pitfalls, and grow stronger as a business.

A buffer between you and HMRC

As well as insight into your financial profile, a good accountant will also offer representation in front of HM Revenue & Customs, if and when you might require it. It helps reduce some of the stress!

Our verdict?

When used in conjunction, bookkeeping software and the services of a terrific accountant are a force to reckoned with.

Without robust bookkeeping down to the decimal point, an accountant can’t possibly do their best work. Without an accountant on the receiving end of the information, there’s a ceiling on how useful even the most meticulous bookkeeping can be if you really want to maximise efficiency in your business.

 
Looking for some more support with your business finances? Compare accountants and learn more about bookkeeping software.

The post Do I Still Need an Accountant if I Use Bookkeeping Software? appeared first on The Cheap Accountants.

While there’s no legal requirement for you to have an accountant on board when you launch your business, their experience and expertise can be a valuable source of information, guidance, and yes – reassurance. So how do you know who to choose, and what can they do to support you? Let’s take a look.

What are the benefits of having a business accountant?

There are several reasons why having an accountant can be useful, including:

• They can help you save huge amounts of time on tasks that would take you much longer, such as tax and VAT returns.
• An accountant has the experience and knowledge to help you stay compliant with Companies House and HMRC rules
• Being in the industry, they’re a good source of information about grants, funding, and allowances suitable for your business
• A professional insight of your tax efficiency. An accountant can help you limit the amount of tax you have to pay, whilst ensuring you’re fully compliant at all times. That includes claiming for any expenses you’re entitled to, but worried about claiming for!
• Help with business planning and financial forecasting, so you can be as efficient as possible

Even brand new startup businesses, or those about to get going, can benefit from their money saving expertise. Don’t let this overwhelm you though. Whilst your business is still in its infancy, you could always enlist a professional on an ad-hoc or consultancy basis.

You might even look for an accountant who charges their services as a monthly fee, helping you to spread the cost.

Writing a knockout business plan

An integral part of all solid business plans includes information about its financial situation and future projections. Any lender or investor looking at your business plan is going to want to see these details. Having a qualified accountant help out with this is a great way to ensure accuracy and authenticity.

Forming your company

An accountant will be able to guide you on what type of business structure would be best for you, such as operating as a sole trader or forming a limited company. They will even be able to help you form and register the business correctly.

Starting as you mean to go on with good bookkeeping habits

Balanced books and organised accounts are key to maintaining healthy cash flow. Having an accountant will help you stay on top of your bookkeeping. Some accountants will even provide you with access to bookkeeping software as part of their services.

Help applying for loans and funding

Accountants are incredibly useful if you’re planning on looking for cash to help your business scale or develop in some way. They’ll be able to help you present your request and supporting information, as well as spot opportunities you might not think of.

Keeping you on the right side of HMRC

Experienced accountants are well-versed in HMRC deadlines and regulations. This knowledge will help to keep your business on the straight and narrow.

Things to look out for in a great accountant

Accountants in general have a lot to offer for a business. To really get the most out of paying an accountant’s fees though, consider the following points as a rough guide to help you choose one right for you.

• Experience working in your industry or sector
• A great reputation, and positive online reviews
• Use of online accounting software or a bookkeeping service to help you keep everything up to date (and without needing to visit them in-person if that’s not a requirement for you)
• Knowledge of the various tax laws and regulations that apply to your industry
• A strong rapport with you and your staff, because things tend to run much smoother when everybody gets along
• Attention to detail and vigilant analytical thinking
• Good communication skills, so you always feel kept in the loop

 
Still unsure about taking the plunge, but need some help? Ask a tax question for free!

The post How Do I Know If an Accountant Will Be Good for My Startup Business? appeared first on The Cheap Accountants.

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 can 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 if you receive property income such as from renting out a room, or 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!

The post Can I Hire an Accountant as a One-Off? appeared first on The Cheap Accountants.

After all, you want to make sure you’re on the right track and setting yourself and your business up for success.

When is the right time to incorporate my business?

You’ll know it’s likely the right time when your profits start to grow because it can be more tax-efficient to own a limited company, but this depends on lots of other factors, such as how much you earn, and any other income you may have.

There are other potential benefits too. The nature of a limited company means it’s a legal entity in its own right, separate from its owners, so your personal assets are protected. Legally, you are not your company, and so you can’t be held personally responsible for any company debts or issues that arise.

Essentially, the bigger and more successful your sole trader business, the more likely it is that you would benefit from incorporating it. But of course, this all depends on your own personal circumstances – which is why speaking to an accountant first is so important!

How do I incorporate a limited company?

First things first, in order to set up a limited company, you need to register your business with Companies House. This can be done in a variety of ways: online, through the post using an IN01 form, or via a company formation service such as that offered by an accountant.

Companies House will then notify HMRC on your behalf (or you can opt to register for Corporation Tax at a later date – as long as you do so within 3 months of starting to trade).

You’ll need to supply Companies House with some personal information as part of the incorporation process, including your full name, address, and National Insurance number.

This also extends to anyone else involved in key roles, such as any other company directors or shareholders. If you’re concerned about privacy and don’t want your private address shared on the Companies House register, you may want to consider using a registered office address for the business. Most accountants will offer this as part of their service, but it’s worth double-checking.

Companies House will also want to know the nature of your business, using an SIC code to classify the type of work you’re involved in. You can search for the appropriate SIC code on the Companies House website.

You (as the ‘subscriber’ or original shareholder) will then need to make a statement of lawful purpose and provide a Memorandum of Association. This is basically just a formal agreement between the shareholders agreeing to form the company, along with the Articles of Association (written rules which explain a director’s powers and what the shareholders are entitled to).

What taxes do limited companies pay?

The main tax you need to know about as the owner of a limited company is Corporation Tax.

This is due no later than 9 months and one day after a company’s financial year ends, with the rate of it depending on the taxable profits reported by the company.

• 19% for companies reporting profits of £50,000 or less
• 25% for companies reporting profits of £250,000 and over
• A marginal rate if your profits fall between these two thresholds

It’s important to note that if you fail to pay Corporation Tax on time, you could be made to pay surcharges and interest on the original amount – so don’t fail to pay!

Other taxes you might need to be aware of as the owner and director of a limited company include:

• Dividend Tax, which is paid by shareholders on the dividend payments they receive from the company’s profits (the exact amount of Dividend Tax a shareholder has to pay depends on their total income, and how much of that income is from dividends)
• National Insurance Class 1 (Primary), which an employer deducts from an employee’s wages if they are younger than State Pension age and earn more than the Primary Threshold
• National Insurance Class 1 (Secondary), which an employer has to pay on an employee’s earnings above the Secondary Threshold (£5,000 since April 2025 onwards)

Should I speak to an accountant before I change my sole trader business into an incorporated one?

Well, you could try and go it alone, but unless you’re a qualified accountant yourself (in which case I think you might be lost) there are likely things you don’t know about, and so it’s generally a good idea to seek the help of an expert in the field.

Your own dedicated accountant can ensure you’re making the right decision and assist in the whole process, making things as smooth and easy as possible.

After all, there are strict penalties if you mess up (e.g., failing to pay your Corporation Tax), so why not just cut out the guesswork and all but eliminate the risk?

You’ll also get more sleep.

Visit our accounting support hub for more help, or to ask a free tax question!

The post Should I Speak to an Accountant Before Switching My Sole Trader Business to a Company? appeared first on The Cheap Accountants.

Some business owners choose to embrace this and absorb the responsibility of bookkeeping and accounting themselves. Others choose to hire an accountant from day one, before their business is even set up and registered.

Basically, all businesses and the internal skillsets are different. Not every business will need an accountant, while others simply couldn’t run without one.

We’re here to help you determine your particular needs and what you can expect an accountant to do for you if you decide to hire one.

The benefits of being your own accountant

If you’re an accounting aficionado and feel you’re up to the task yourself, you can run your small business without a professional accountant. As long as you’re confident that you know your stuff, it’s a great way to avoid additional outsourcing costs.

Plus, when you’re that close to your books, you’ll get to know all the numbers like the back of your hand. This means you can make better-informed business decisions and quickly spot if any problems are about to arise (although regularly reviewing your financial reports will help too!).

Doing it yourself also means you don’t have to wait for an accountant to be available for meetings or tasks – you can simply crack on at your own pace and on your own timeline.

When to hire a professional accountant

If you’re not clued up on bookkeeping and accounting, that’s perfectly okay. Your specialist area is growing a business in your niche. However, it does mean you’ll need to hire a professional to take care of your accounting for you.

Even for those who have extensive financial experience, accounting can be complicated and almost always extremely time-consuming. Hiring an expert to take the weight off is often the preferred option.

The main benefits of hiring an accountant

The three overarching advantages that working with a qualified accountant brings to the table are:

• Money-saving: They will ensure you are as tax-efficient as possible, i.e. keeping your tax bill as low as it can be by claiming allowable expenses and applying for tax relief. They’ll also help you avoid costly financial penalties for incorrect accounts or missed deadlines.
• Timesaving: Leaving things like your bookkeeping, tax returns and funding applications in an accountant’s hands means you have more time to focus on running and growing your business.
• Stress-saving: Saving you time and money and ensuring you meet deadlines and avoid errors will give you more peace of mind.

All in all, an accountant is there to make your life easier and help safeguard your business from as many financial problems as possible – even in ways which might surprise you.

Plus, you don’t have to hire them for any specific amount of time. If you only want to hire them to file your tax return for you, you can. That way, it doesn’t have to be as much of a cost commitment.

What does an accountant do?

As we touched on above, an accountant is there to make sure you’re tax-compliant but also tax-efficient. This means making sure you’re abiding by all of HMRC’s obligations and that you’re running your business in the most tax-effective way possible.

Below are some of the things an accountant can offer your business.

Help manage your cash flow

When running a small business, cash flow can be unpredictable at times. Some months you’re flying and others you’re in the red or barely breaking even. That’s the reality, but an accountant can help you find ways to keep your cash flow stable.

Support your spending strategy

When you’re as close to your business as you are, it can be hard to see the wood for the trees. An accountant offers an outside perspective that will let you know when and where you can spend versus when and where you need to cut back.

Create financial reports and forecasts for you

Generating things like profit and loss statements and cash flow forecasts—just to name two—takes time, effort and skill. An accountant can do this for you while you carry on doing what you do best. You can then use this data and information to inform your business strategy.

Liaise with HMRC on your behalf

Communicating with HMRC is daunting, we get it. That’s why it’s such a relief to know your accountant is allowed to liaise with HMRC on your behalf if need be. They know all the correct terminology and the right things to say.

Help with your business plan

An accountant will be able to help you build your business plan and stand it in good stead when it comes to things like funding, investment and loan applications.

Top tip: look for an accountant who specialises in small businesses in your sector as they will understand the landscape in your area of expertise more comprehensively.

What does an accountant charge?

Accountancy fees vary depending on who you go with, where they’re based, and what services you need from them. The answer really is “it depends”!

Check out our separate article about accounting fees for self-employed businesses.

But I already use bookkeeping software…

Great! Using bookkeeping software is the perfect way to keep all of your financial information up-to-date and accurate.

However, it isn’t a direct replacement for an accountant – accounting and bookkeeping are two different things, despite going hand-in-hand.

Joining the forces of your bookkeeping software and a skilled accountant is one of the best things you can do to set your small business up for success.

On the hunt for a new accountant? Compare accountancy packages to get started.

The post Can I Run a Small Business Without an Accountant? appeared first on The Cheap Accountants.

But what is PAYE and how does it work? We’ve put together this article to help.

What is PAYE all about?

“PAYE” is short for Pay as You Earn. As the name partly suggests, it’s a mechanism for employees to pay their income tax and National Insurance contributions while they’re earning.

No matter how regularly you pay your staff, they’ll need to pay tax, NI, and other contributions such as pension payments, on their income.

PAYE enables employers to deduct these payments ‘at source’ – that is, from their employees’ wages, and then pay everything over to HMRC for them.

An employer’s PAYE scheme can also be used for other deductions such as car payments and student loan deductions.

In short, employers become the tax collector, so that employees don’t need to spend time on tax returns (and risk getting it wrong) to report employment income.

Making deductions through PAYE

How much you deduct depends on the employee’s tax code, what they earn, and any other contributions they need to make.

For example, a tax code shows how much an employee can earn before they have to start paying tax (an amount known as their personal allowance).

The most common tax code is 1257L. This shows that the employee can earn up to £12,570 in a year before they need to start paying tax.

An employee might also need to pay National Insurance or pension contributions, and student loan repayments too!

How do I know when to register for PAYE?

You’ll need to keep really accurate, up-to-date records of everything that you pay to or deduct from anyone in your business, but you might not need to register for PAYE straight away.

You’ll need to register if any employees or directors:

• Are paid £123 or more a week
• Receive taxable expenses or benefits
• Have another job
• Get a pension

Is registering for PAYE fairly easy?

This depends on a few things, not least if you’ve done it before. The process itself is relatively straightforward but as ever with HMRC, the information you might need can seem confusing.

It’s why many companies decide to use an accountant to register for PAYE rather than go it alone, but there’s no requirement either way.

The important thing when operating payroll is that it’s absolutely accurate.

The information you put into your payroll calculations must be correct, and the system that you use must be reliable!

It’s your responsibility to make sure everything is correct, and that both your employees and HMRC receive the right payments, at the right time.

Otherwise, you could end up with hefty fines, and some very fed-up staff.

What information do I need to set up a PAYE scheme?

Whether you decide to register for PAYE yourself or get an accountant to do it for you, there’s some information you’ll need:

• Company name (or business name if you’re a sole trader)
• The company director’s full name and NI number
• Company Registration Number (CRN)
• Nature of the business
• Company unique taxpayer reference (UTR) number
• Business address
• Number of employees
• First payday

Once you register online for the PAYE system, you should get a PAYE reference in the post along with an Accounts Office Reference.

This will be sent out to the address your business is registered to, and usually takes around 5 working days to arrive.

What are the benefits of using an accountant?

Your working day is busy and frankly, you just want to get on with what you do best. By handing over all the fiddly bits to a specialist, you can save time that’s better spent growing your business – but do you actually need an accountant for your business?

Getting the details right

Accountants have seen it all before – many, many times. They’re experts at completing and submitting tax forms and know exactly what HMRC is looking for.

There’s also far less chance of expensive errors that can hit you hard in time and money.

Cutting your tax bill down to size

When you submit your tax return, it’s not just about ticking a few boxes and checking figures. There are lots of ways you can (legally of course) reduce your tax bill through tax breaks and reliefs.

Some of them you’ll probably be aware of already, but many of them you won’t. Any accountant worth their salt will help you make sure that you don’t pay more tax than you should.

In fact, the savings you make can often cover the cost of using an accountant in the first place. You also don’t need to spend your time trying to keep up with ever-changing tax legislation.

General business advice

A decent accountant will often be in the best position to offer tailored advice that suits your growing business. They’ll likely have dealt with similar businesses before and will have in-depth knowledge of your finances.

There’s lots you can ask your accountant to do for your business. Having the chance to bounce ideas about and discuss things with your accountant is also really important.

They can offer valuable support and give the kind of objective feedback that’s hard to find elsewhere. And if you’re struggling with something that your accountant can’t help with, there’s a high chance they’ll know someone who can.

Find more tips and advice for your business on our website, or tap into our guide on hiring the right accountant.

The post Do I need an Accountant to Register for PAYE? appeared first on The Cheap Accountants.

The benefits of hiring an accountant to do your Self Assessment

We might be biased, but when it comes to completing your tax return accurately, on time, and with minimal impact on your time and stress levels, hiring an accountant is invaluable.

It doesn’t even have to be an accountant you hire all year round either. You can simply reach out to an accountant when the time comes.

Significant time-saving

Completing your Self Assessment is like anything else in life. If it’s not something you’re well-versed in, it’s going to take you a heck of a lot longer than somebody who is a pro.

Leaving your tax return in the hands of an accountant and simply sending them all the information they need will speed up and streamline the process. You’ll get it off your to-do list much faster.

Less room for error

Similarly, when you attempt to tackle something you don’t do very often, you’re likely to make a fair few mistakes here and there. This is especially true when it’s something as complex as a tax return. One decimal point out of place could land you in serious trouble.

As well as ensuring the accuracy of your financial records, an accountant will help you make sure you hit HMRC’s unforgiving deadlines too.

Help ensuring your business is as tax-efficient as possible

A good accountant will make sure they offer guidance and advice about where your business could be more tax-savvy. They’ll know where to find tax relief, and what you could be claiming to help protect cash flow.

Somebody to answer your questions

It helps just knowing that there is somebody there to answer your questions when you need it. Tax can often feel like you’re stumbling around in the dark like a headless chicken. Your accountant will be an ally who knows what they’re talking about.

As the old adage goes, leave it to the professionals. When you entrust your tax return to somebody who, quite literally, makes it their business to get it right, you can breathe a sigh of relief.

The pros and cons of submitting your Self Assessment return yourself

Considering going it alone and completing your tax return independently? We salute you! Just familiarise yourself with the pros and cons below first.

The advantages of a DIY Self Assessment return

Doing it yourself isn’t all bad news, despite how appealing the prospect of hiring an accountant might be. There are perfectly valid reasons why some people choose to take on the challenge themselves.

Mostly, to save money

Although it’s fairly inexpensive, particularly if you use an online accountant, getting an accountant to sort out your Self Assessment tax return does come with a price tag.

Some people simply can’t afford it so might need to look at other options, or need to spend their budget elsewhere.

Matters of privacy

For some people, choosing to submit their own Self Assessment return is about protecting their personal data and information. If you work with a reputable accountant, this should never be an issue. But for the super-cautious, the DIY approach just feels safer.

Peace of mind (again)

We mentioned peace of mind as one of the benefits of hiring an accountant to submit your tax return but hey, peace of mind can be a subjective concept. Some people might find more reassurance in controlling the process and timeline themselves – and that’s okay too.

The downsides?

When you do it yourself, you don’t get any of the benefits of hiring a professional to file your tax return. We went into more detail above, but as a quick recap:

• Time-saving and freeing up your valuable working hours
• Reducing the risk of error and omission by capitalising on their skills and experience
• Help making sure your business remains compliant and tax-efficient
• Having someone there to answer your questions
• Reassurance and peace of mind

The Self Assessment return process has the potential to be stressful, complicated and extremely time-consuming. It’s vital that you understand the undertaking of the task before embarking on it alone.

Read our guide to finding the right accountant for your business, or ask a tax question for free! 

The post Do I Need an Accountant for Self Assessment? appeared first on The Cheap Accountants.

Larger businesses with more wiggle room in the budget might still choose not to hire an accountant. Instead, they’ll recruit an in-house accounts or finance team to take care of everything internally. With this addition to the company workforce, there’s no need to outsource the work to an external practice unless you need specific advice.

Whilst it’s not a legal requirement, and it’s entirely up to you and the needs of your business, almost every business will benefit from an accountant.

In this article we look at the reasons why, highlighting some of the most commonly reported benefits of having an accountant up your sleeve (metaphorically speaking):

• Significant timesaving
• Helping you run your business as tax-efficiently as possible
• Making better business decisions
• More clarity and (therefore) confidence
• Saving you money in the long run
• General peace of mind

An accountant can save you valuable time

The most obvious advantage of hiring an accountant for your business is the hours and hours’ worth of valuable time they can save you. From starting out and setting up your company correctly, to its ongoing management.

The bookkeeping and finance tasks which you find onerous and time-consuming are bread and butter to someone who does these things all day long. Once you are all set up, having an accountant frees up your precious time, allowing you to invest more energy elsewhere.

Plus, handing the responsibility over to someone who knows what to expect from the figures reduces the risk of human error and omission on your part. So you’ll save time rectifying unnecessary mistakes, too!

They’ll help you understand what you need to do in order to manage your business efficiently, without spending hours researching on your own. That just leaves you to concentrate on more pressing matters – like growing your empire!

It can save you significant money in the long run

Although hiring an accountant might seem expensive initially, doing so will likely save you money in the long run. It can be turn out to be a useful investment, particularly if you find an affordable accountant.

Accounting professionals have the financial skills and industry knowledge to help you capitalise on any cost-saving opportunities. As well as working with you to limit business expenses, they’ll make sure you claim back any tax relief on what you do spend – steering you towards a positive cash flow situation.

Help ensuring your business is running tax efficiently

It’s an accountant’s job to stay on top of all the latest regulations and legislation. As a result, a tax accountant will reduce your tax bill and help you claim tax relief. They will also protect you from HMRC penalties by helping you meet necessary deadlines and requirements.

A good financial advisor will also be proactive in making sure any allowances, expenses and government schemes work in your favour. They’ll even be able to guide you on the best way to pay yourself from the business whilst protecting the company, as well as your pocket.

Boost your own clarity and confidence

When you hire an accountant for your business, you’re basically paying to access their knowledge and experience. Absorb it to your own advantage!

Working with your accountant will help you understand more about running your business, the industry, and its systems. We’re not suggesting you upskill with a view to one day firing your accountant. But getting a feel for their thought processes and logic, as well as learning what resources they use (such as your bookkeeping) will give you confidence in your own decisions.

Well informed decisions lead to more stable cash flow, healthier finances and more realistic forecasting. When you have a clearer vision for moving your business into the future, it becomes more attainable. It’s the domino effect in action.

Providing you with peace of mind

With all of the benefits covered in this article considered, the main overarching advantage that comes of hiring an accountant is nurturing your own peace of mind. Running a business is stressful.

When you know your business and its finances are in the capable hands of a qualified professional or a reputable team, you can relax (a bit).

So how do I choose an accountant to help me?

The best place to start is by doing plenty of research. It will help you get a feel for what services you’re likely to need, and whether you need someone local or an online accountancy service.

• Make sure they’ve got all the relevant qualifications and certifications. Chartered Accountants are the cream of the crop, but don’t overlook experience! A good practise will have a mix.
• It’s not essential, but you might consider looking for an accountant with experience within your particular industry or sector.
• Ask around your network. If you trust someone’s judgement and they make a recommendation, it’s worth investigating at least!
• Read plenty of online reviews – they’re often more candid than the customer testimonials or case studies you’ll find on an accountant’s website.
• If you prefer in-person meetings, look for a local firm or an accountant close to home.
• As a limited company you’ll need to submit company tax returns for the business, and Self Assessment for your own income. Find an accountant who will bundle them – it’s cheaper!

Read our guide to finding the right accountant for your business, or ask a tax question for free! 

The post Do Limited Companies Need to Hire an Accountant? appeared first on The Cheap Accountants.

That said, there’s a whole host of reasons to hire an accountant for your business. In this article, we outline seven of the most common examples.

1. When you start buckling under the weight of responsibility

As a business owner, the weight of your to-do list can feel like ten tonnes. That sort of pressure can really take its toll.

If you find that your mental wellbeing and stress levels are starting to suffer from the workload, you need to delegate.

Passing the task of managing your bookkeeping and accounts onto an experienced professional can free up invaluable time, headspace and peace of mind.

This will help you to focus with greater clarity, and make better decisions for your business.

2. When you need some advice on your tax relief options

An accountant will do more than ensure you submit your tax return by the deadline. They will also be able to identify opportunities to claim tax relief.

Depending on the size, sector and circumstances of a business, there are a multitude of relief options to take advantage of in order to reduce expenditure.

It’s an accountant’s job to stay on top of these opportunities, and ensure you’re reaping the rewards of any benefits available to your business.

3. If you’re facing a challenge with your cash flow

When you run into financial difficulties, or any issues with your cash flow, having an expert on hand can help guide you out of the woods.

It’s easy to lose track when dealing with business finances on your own. Outstanding payments and forgotten invoices can all tip the balance of your income and expenditure, which can be extremely damaging to the health of your cash flow.

An accountant will help keep you on track and take care of all those important details and deadlines.

4. When you’re ready to register your business for VAT

Your business doesn’t need to register for VAT until your taxable turnover reaches £90,000. Once you reach that point – and if you aren’t already working with an accountant – it’s a great time to enlist the support of an expert.

Having an accountant helps to ensure that you’re doing everything you should be to satisfy HMRC, whilst staying as tax efficient as possible in the process.

5. If you’re looking for guidance on Making Tax Digital (MTD)

Making Tax Digital (MTD) is a government initiative for turning tax administration into a fully digital system.

It aims to “make it easier for individuals and businesses to get tax right and keep on top of their affairs”.

As of April 2019, businesses with VAT taxable sales greater than the registration threshold must keep digital tax records, and HMRC will expand the scope of the initiative to include Self Assessment from 2026, too.

Hiring an accountant helps make the transfer to MTD simpler for you and your business. It’s also useful to get to grips with cloud-based accounting if this isn’t something you’re already using.

6. When you’re looking to expand, invest or secure funding

Some businesses owners are unaware that an accountant can help you create a really solid business plan.

Having an expert contribute to the creation of your business plan will stand you in much better stead when it comes to applying for grants, loans, funding and investment.

These injections of cash are often significant accelerators for small or start-up businesses, sometimes even the difference between success and failure.

An accountant will help you position your business in a way which is genuine, whilst appealing to investors and funding providers.

7. Once you start employing staff

When your business is in a position to start recruiting employees or paying dividends to shareholders, it’s wise to seek support.

An accountant will manage your PAYE calculations, and offer valuable advice on allocating funds efficiently.

As well as the logistics of payroll, accountants can also offer advice about your additional outgoings, such as salaries and wages.

So what now?

Signing up for a financial service that cripples your cash flow is counterproductive! Compare pricing and accounting services.

Looking for more information before making a decision? Check out our advice on knowing whether an accountant will be good for your business.

The post How Do I Know If I Need an Accountant? appeared first on The Cheap Accountants.