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.

Known as ‘appointing a paid agent’, it basically means delegating to a professional who will then liaise directly with HMRC about your finance and tax-related matters.

Who can be an agent for me?

Paid agents can be tax advisors, solicitors, or accountants, but you can authorise almost anybody to act on your behalf when it comes to dealing with HMRC, including family members and friends.

This type of agent is known as a ‘trusted helper’.

Although you have a number of options when it comes to who you can appoint as your agent to deal with HMRC, there are advantages to selecting your accountant for the role.

What can my accountant do as an HMRC agent?

An appointed agent can act on the taxpayer’s behalf for different types of tax, such as Corporation Tax, VAT, PAYE and Self Assessment – you might even have different agents for each one.

Simplifying processes and communication

Communication with HMRC can involve anything from queries and requests for information, to payment notices and deadline reminders. Appointing your accountant as your agent means the majority of this correspondence can be filtered through them.

This can make life a lot easier, leaving your agent to relay information to you as needed (and translated into plain terms, rather than scary-sounding HMRC speak).

Audit representation

If HMRC decide to audit your accounts or launch an inspection, your accountant will be able to make sure everything is in order, and talk you through what’s happening. An HMRC audit can be a daunting prospect, so having a professional in your corner can be a valuable source of confidence and support.

Compliance and strategy

As well as helping you stay on top of all your deadlines, your accountant will make sure you remain fully compliant with HMRC at all times.

They’ll also be able to help you optimise your tax efficiency, improve your financial reporting systems and save costs in line with all of the necessary rules and regulations.

Save yourself some time

As well as the tools of the trade that an accountant can bring to the table as your paid agent, there is also the overall benefit of significant time-saving – gold dust for business owners, right?

Having a professional at the helm of any back-and-forth with HMRC means you can focus on other things, like growing your empire. It also reduces the risk of any errors or confusion along the way, which, again, buys you back invaluable time and fends off financial penalties.

Keep stress to a minimum

All the above benefits combined make for a far less stressful relationship with your taxes and HMRC. Entrusting your accountant takes the pressure off you in exchange for peace of mind that your tax affairs are being dealt with by those who know what they’re doing.

How to appoint an accountant as an agent

The first thing to do is check your accountant meet HMRC’s standards for agents.

If you’re satisfied these standards are met, the next thing you need to do is provide your chosen agent with permission by appointing them through one of HMRC’s official authorisation processes.

Your agent will be able to guide you through whichever method is best for you.

Authorising your agent with a 64-8 paper form

A 64-8 form can be used to authorise an agent to deal with Self Assessment, partnerships, trusts, tax credits and people being paid via the PAYE system. It’s also used for VAT and for Corporation Tax.

You and your accountant can work together to make sure all the necessary fields are filled in before you send it back to HMRC to process.

Authorise access to your accounts online

Your accountant can apply for access to your tax accounts through their own HMRC Agent account.

This process will generate an agent code for each tax type they’re dealing with for you, which will be sent to your registered business address. Share these codes with your accountant so they can complete the authorisation on their end and start acting on your behalf.

Grant access through your tax account

If you’d prefer to grant your accountant access to act as your paid agent yourself, you can do this through your business tax account by signing in using your Government Gateway or One Login.

Note: You will need to be set up and registered for HMRC Online Services for this method of agent authorisation.

A ‘digital handshake’

This is where your agent sends a link for you to click that will digitally authorise them to deal with HMRC on your behalf.

What happens after I appoint an agent?

Once somebody, such as an accountant, has been appointed as an agent ready to act on your behalf, you can arrange for them to receive most of your correspondence with HMRC. There are a few exceptions to this, including your tax bills and any refunds you’re eligible for.

Removing an agent’s access

If you no longer wish for somebody to have access to your accounts or act on your behalf as an agent, there are two ways you can undo this:

• Go to your HMRC business tax account (if you have access to this) and remove or swap the agent
• Contact HMRC over the phone or via post, and they will be able to guide you through the agent removal or replacement process from there

Your responsibilities as a taxpayer

Appointing a representative agent is useful but you (the taxpayer) are still ultimately responsible for reporting and paying your own taxes.

That’s why it’s so critically important to have a communicative relationship with your trusted agent(s) and provide them with honest, detailed, and up-to-date information.

It’s also essential to review all documents and tax returns that are shared with HMRC on your behalf to ensure that your records are accurate and compliant. If they aren’t, you’ll be the one dealing with the repercussions, such as financial penalties, not your agent!

 
Looking for more business support? Head over to our info hub for the latest news and handy resources.

The post Can My Accountant Deal with HMRC for Me? appeared first on The Cheap Accountants.

We’ve spoken many times before about the benefits of hiring an accountant to help your business be as tax-compliant and tax-efficient as possible. That said, affording the cost of an accountant is another kettle of fish, especially if you’re just starting out or hitting some financial struggles.

So, if you can’t afford to add an accountant to your outgoings, what are your options? After all, your tax returns are still going to roll around each year regardless.

In this article we explore your options if you can’t currently pay to hire an accountant. Don’t worry, there’s still plenty of help out there to keep you on top of your taxes with as little stress as possible.

Reach out to HRMC if you have tax questions

If you have any simple queries, you can contact HMRC online or call them to see if they can guide you.

HMRC also provides a whole host of different online resources to help taxpayers of all shapes and sizes. On the website, you’ll find things like free webinars and videos, tax return guides and handy tax calculators, all designed to support you.

Explore HMRC’s Tax Help hub.

Get in touch with TaxAid

If HMRC can’t help you out, your next stop should be TaxAid. It might also be your first stop if you’ve ever tried to look at one of HMRC’s tax manuals! TaxAid gives free, independent and confidential advice to low-income UK taxpayers aged under 60 or who are self-employed. It aims to make all things tax easier to follow and understand as a business owner who can’t afford the cost of leaving it all to the professionals.

It also supports those who:

• Have physical or mental health issues
• Struggle with addiction
• Have undergone traumatic or life-altering events
• Have poor communication, numeracy and/or literacy skills

You can call TaxAid’s dedicated helpline if you need some assistance: 0345 120 3779.

Use free online guides, templates and tutorials

The internet is full of free resources you can use to navigate your self-employed tax and accounting responsibilities. It can also be a bit too full of advice, at times. Do your homework and only use resources and guidance from sources you know are reliable. It’s also important to make sure you consult resources from the correct country! The tax rules in the UK are different to those in the US, for example.

Take advantage of free accounting advice

Even if you can’t afford to hire an expert, Google has got your back. Or rather, the fantastic accounting firms out there that are open to sharing free advice and resources online to help people in your situation.

A great example of this is the Ask an Accountant feature offered by The Accountancy Partnership, where you can ask a qualified accountant a tax question for free.

Some firms will offer things like consultations to support you without having to commit to paying for the full service.

Take a course in accounting basics

If you think you may not be able to afford an accountant for the foreseeable future, it could be worth equipping yourself with the basic accounting skills you might need.

There are dedicated course websites like Coursera, the Open University, Udemy and edX but YouTube is also a great place to browse for free but valuable learning content.

A course may require an initial investment as some will be paid but there are plenty of free versions available. Even if it does come with a price tag, it could save you a lot of money in the long run. You might be able to claim the cost as a business expense, by deducting the amount from your total income when you submit your tax return to HMRC.

Use free bookkeeping software

Good bookkeeping habits are the foundations of accurate, timely and low-stress accounting, so finding free bookkeeping software will make your life a whole lot easier.

Don’t be afraid to ask for help

If you are in a position where you can’t currently afford the cost of an accountant, don’t be nervous about reaching out for help. There are so many other business owners in exactly the same boat, which is why there are so many brilliant free resources out there!

Don’t be afraid to speak to other business owners you trust about general advice or help with specific tax-related topics. They may be able to show you how to do something, help you understand something you’re confused about, or point you in the direction of some other great tools and resources they rely on themselves.

If you don’t have a trusted network of like-minded business owners, you could consider joining a business support group or look on social media platforms like Facebook or LinkedIn. There you’ll find communities of people just like you, with questions just like yours.

 
Managing your taxes yourself can be tricky, especially if you’re not familiar with the rules! Check out our accounting support hub for more help, or to ask a tax question for free.

The post What Can I Do if I Can’t Afford an Accountant? appeared first on The Cheap Accountants.

What are the advantages of using more than one accountant?

Why might a business owner choose to work with more than one accountancy firm at the same time? There are lots of reasons, such as needing specialist support in one area of the business, or to keep different businesses separate.

Tap into specific skillsets where you need them

Perhaps you operate one business as a sole trader, and also own and operate a limited company. You might want to delegate each of your accounts to experts in these areas.

For some businesses it can be more complicated than that. For example, you might need an accountant who deals with Capital Gains Tax to help you with one particular income stream, or someone who specialises in R&D claims.

Keeping your accounting and bookkeeping separate

Accountants and bookkeepers carry out different roles – some business owners prefer to assign these responsibilities to multiple firms or contractors.

Making the transition

Some business owners will overlap the firms they work with for a period of time, as they transition from one to another.

The benefits of sticking to one accounting firm

Looking at the situation from the other side of the fence, let’s now explore why using one accounting firm at a time might be the preferred option. These are only general points though. Every business is different so your needs might not fit neatly into any of these!

More well-rounded knowledge of your business

When an accountant has full access to every part of your businesses, they have a much more comprehensive picture. This, in turn, allows them to advise you on ways to be more tax efficient across the board, and help you make more savvy decisions around things like spending, cost-saving, investments and recruitment.

You can avoid paying double fees

When you only work with one firm at a time, you only have one invoice to worry about paying. Your accountant might charge you for each business (because they’re doing more than one set of accounts), but may also offer discounts if you sign up multiple businesses for their services. Accountancy fees can vary, so do your research!

A more streamlined process

As with most processes in life, when everything is all in one place, things seem to run a whole lot more smoothly. Sticking to one accountancy firm at a time will lighten both your cognitive and admin-based loads.

Stronger relationship-building

Investing all your time and energy into one accountancy firm or accountant will bolster your professional bond with them. That’s not to say, of course, that you can’t have great relationships with multiple service providers.

How to find the right accountant for your business

Whether you’re looking to use multiple accountancy firms or put all your eggs in one basket, it’s essential to do your homework before making any final decisions.

Here are just a few of our top tips for finding the right accountant for you and your business:

• Read plenty of reviews online: There’s nothing quite like reading through client-generated reviews (rather than company-created case studies) to see real opinions.
• Set up an intro meeting: If you come across a firm or accountant that you like the sound of, set up a call to get a better idea of whether you’re going to get along.
• Check out their client base: Investigating which customers a firm or accountant typically works with will give you more insight as to whether they’re the right fit for you. If they work with other businesses in your sector, for example, you’ll know they have plenty of relevant experience and transferable knowledge.

 
Compare accountancy packages, or ask a tax question for free!

The post Can I Use More Than One Accounting Firm at a Time? 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.

Good accountants can be used as a key tool for growing your business, so here are our top five ways to get the most from them.

Give them the right information

In an ideal world your accountant would follow you around, recording and considering all of your financial transactions and advising you of the tax implications.

Fortunately, accountants generally don’t have the time or desire to stalk their clients 24 hours a day. Unfortunately, they depend on you to give them a complete and accurate summary of your financial year!

A good accountant can usually draw out the relevant information with some basic questions, but the more effort you put into the basics, the less time you’ll have to spend on getting what you actually came for – an informed opinion on how you did with your finances from a tax perspective, and advice on how to minimise your taxes going forward.

So in simple terms, your first step in getting the most out of your accountant is to create an accurate and concise snapshot of your finances.

Tap into their networks

>As a small business, it is likely that the accountant you’re using is also working for a host of other businesses. Ask your accountant if they’re willing to initiate networking opportunities between you and other clients. This could lead to business deals, partnerships or a support network of people facing the same problems as you.

Value their advice

Your accountant will have expert knowledge of not only your business but of others like it. This means they can help you uncover ways of expanding your business and reducing your costs, as well as indicating areas where you need to spend more. It’s likely that any problem you face will be familiar to an experienced accountant, so they will most likely know how to solve it. Trust them!

Never lie!

Doctors can save your life, lawyers can save your freedom and accountants can save your livelihood, so always tell them the truth. Accountants need to know every fact about your business so they can work out how much tax you pay and how your business can make the maximum amount of profit. If you lie to them about your finances, this could lead to mistakes in your bookkeeping and possibly even the downfall of your business.

Arrange regular catch ups

Accountants usually have a large number of clients, meaning you can’t rely on them to contact you all the time. You should arrange to have monthly meetings or weekly phone calls with them, allowing you to discuss any problems you have before they gets too big. If you delay speaking to them and then dump all of your difficulties on them at the end of the tax year, problems may escalate and cause a last minute panic.

 
Check out our accounting support hub for more help and resources, or to ask a tax question.

The post Five Ways to Get The Most From Your Accountant appeared first on The Cheap Accountants.

You may need an accountant to take care of your bookkeeping and payroll for you, or maybe you’re just looking for some friendly advice.

Either way, you want to consider all your options before committing to anything, and this includes comparing different quotes to ensure you’re getting the best deal. In this article we’ll explain a few things to consider if you’re trying to decide whether an online accountant or a traditional high-street approach is best for you.

What is the difference between online and traditional accounting?

Nowadays, keeping track of your accounts is easier than ever through online accounting. This often makes the whole process simpler and gives business owners better access to their records.

You can still do your accounts the traditional way though – going to see an accountant in-person on your local high street – and for some people it’s the better choice. It all depends on your specific needs.

Let’s go into a bit more detail to help you understand the key differences between online and traditional accounting.

What is online accounting?

There’s sometimes some confusion between online accounting software, and online accounting services.

The software is just that; it’s accounting software which is hosted online using multiple secure locations, as opposed to being downloaded to a single device. This not only makes data more secure, but also more accessible.

You can update your bookkeeping records anywhere (and on any device) as long as you have the login and an internet connection.

This kind of software deals with record-keeping, so you might still need an accountant even if you use online accounts software.

An online accountant is just like any other type of accountant, but rather than visiting them in-person you can talk to them online, by phone, or with video calls.

How does online compare to traditional accounting?

A traditional (or local) accountant won’t necessarily need to see you in-person, but you’re more likely to have the option to do so. This can be good if you prefer to do things like talk about tax face-to-face.

It might also mean you can just drop off your records and receipts, and they’ll turn this into bookkeeping records and then into a proper set of accounts.

Although at this point it’s worth mentioning that most online accountants offer a bookkeeping service, and lots of high-street accountants will provide you with bookkeeping software. The gap between the two is much narrower these days!

Access to software

This access to online software can be incredibly useful whether you end up with an online accountant or a local one, especially if you need to keep financial records digitally so you can comply with Making Tax Digital requirements.

Without it, you’ll have limited access to your accounts and won’t be able to make changes yourself. Instead, you’re relying on your accountant to get back to you and to send you any reports, which can obviously take a bit of time if they have other clients to look after as well.

Should I choose an online or high-street accountant?

Even with a local accountant, you might find that you don’t need to see them in-person all that often – if at all. Even signing documents and carrying out identity checks can be dealt with online, so the real choice comes down to whether or not you feel more comfortable at least having the option to call in on your accountant if you want to.

It’s a very personal choice!

Before committing to that local firm though, just double-check that they do indeed offer in-person meetings. Lots of traditional sectors are moving to an online-first way of servicing clients.

Tips on finding an accountant

Would you believe that in the UK, literally anyone can call themselves an accountant? Yep, the title isn’t legally protected in the UK. Don’t panic though, because there are ways you can spot legitimate accountants.

Making sure your accountant is appropriately qualified

The easiest way to do this is by looking for specific qualifications.

For example, you could look for a Chartered Certified Accountant (commonly abbreviated as ACCA) or a member of the Institute of Chartered Accountants in England and Wales (ICAEW).

Now, if you’re a freelancer or have recently formed a new company, you’ll probably be more worried about the price than anything else (like experience, level of expertise, etc.)

This is completely understandable, but you still want to make sure the accountant you pick is qualified to do the job and can be trusted with your sensitive information. Otherwise, it could end up costing you more – in the form of fines!

You also want to find the right accountant for you.

Consider whether you’d be fine with a generalist accountant who covers all the bases, or whether you’d benefit from having someone with specialised knowledge. For instance, if you need a landlord or forensic accountant.

Lastly, you can also just check things like reviews and comparison pages to give yourself a better idea.

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

The post Online vs Traditional Accounting: Which Is Right For You? appeared first on The Cheap Accountants.

What can an accountant do for my business?

Accountants are often a valuable resource for a business. As well as expertise around tax planning and compliance, a good accountant can also help you with:

• Financial forecasting and planning
• Lease negotiations
• Cash management and cash flow
• Setting up bookkeeping systems

Read our guide to learn more about accounting services you might find useful for your business.

Finding an accountant that’s right for you

The best advice is to work with someone who really understands your business and its ambitions. A starting point for finding an accountant is to ask contacts in your industry for recommendations and referrals, but it’s incredibly important to keep an open mind. What works well for one person might not be right for another!

It’s tricky to hire an expert in an area you’re not familiar with, so your screening process should help you work out if they’re going to be a good fit.

Do they understand your industry?

An accountant who already has experience working with clients in your industry might be able to ‘hit the ground running’, as it were. Any good accountant will take the time to understand where your pinch points are, but someone who already has this knowledge might also be able to get you moving in the right direction more quickly.

Some industries, such as farming, are particularly specialised in terms of tax rules and allowances, so you might need an accountant who concentrates on this area, rather than general small businesses.

Other sectors, such as contracting, will have considerations around the Construction Industry Scheme or IR35 to think about, so a good awareness of this will be invaluable.

Don’t be afraid to ask any potential accountant about their experience in your sector, and to highlight any particular rules and regulations you should be aware of.

Are they easy to understand?

Tax regulations contain a lot of technical language. Find an accountant who can explain complex tax topics in an accessible and simple manner. A pro who helps you to understand financial topics will also be helping you to understand and manage your business in the process.

Can they handle your business needs?

Depending on the size, ambition and complexity of your business, you may require a strong team to dedicate themselves fully to your business’s needs and work directly with you on high-level business planning. Make sure whoever you choose is able to handle your present and future accounting requirements.

The acid test? If you’ve found the right accountant, six months in you’ll no longer be wondering if you need one and asking what they can do for you!

How to work with your accountant

Your accountant will normally go over the basics with you right at the start of your relationship, but it’s useful to know what you should prepare. We’ve put together a short summary of what you’re likely to cover with them.

• Deductible business expenses: A good accountant will carry out a full review of all your spending when they complete your accounts. This will help them make sure you claim for any costs as a business expenses. It’s also a good indicator of efficiency in the business. For example, if you’re spending too much on the ‘nice to haves’ when the business would benefit from prioritising something else.
• Upcoming changes to regulations: Most accountants will spend time familiarising themselves with new tax regulations – it’s their job! Good accountants will contact you when there are changes to tax regulations that will affect your business, informing you of any way in which you can use those changes to your advantage, or if they will affect you in other ways. Making Tax Digital is a good example!
• How your business’ legal structure affects your tax filing: The way you register your business has a big impact on how and when it pays tax, so check in to make sure you’re using the one which best suits your circumstances.

Working with the right accountant on a long-term basis can lead to faster growth and ongoing financial success, as well as less stress. It may require time, money and effort to get right, but in the long term it’s a business investment – and one you won’t regret.

Check out our accounting support hub for more help and resources, or to ask a tax question.

The post Find, Hire and Work With a Great Accountant 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.