When starting out on your own, it can be tempting to cut corners to save some cash. While it’s certainly possible to be self-employed without an accountant, many soon find that their “cost-effective” measure actually ends up costing them more money.
No matter your status, if you are self-employed it is advisable to have an accountant to ensure you are meeting all of your obligations, helping you avoid any trouble down the line.
Self-employment is an attractive route for many people, allowing them freedom and flexibility in their work schedule. However, being out on your own means you also bear the brunt of all associated risks.
Figuring out your business needs
If your business brings in less than £82,000 per annum in earnings, then HMRC allows your business to adopt cash-based accounting. This means you only need to provide HMRC with details of your actual income and expenses in the tax year, without including any money you are owed or that you owe. This type of accounting is best suited to sole traders and small business.
However, many small businesses prefer an accountant to take care of this, ensuring they have their bookkeeping streamlined and their earnings reported accurately. A professional accountant will understand your business needs and expenses and ensure you are always paying the correct amount of tax – not over or under.
This allows you to focus on running your business instead of worrying about your taxes.
What can an accountant do for me?
Aside from offering a reliable and professional service, an accountant offers the self-employed peace of mind. You can rest easy knowing that your accounts are updated regularly and accurately and that you are claiming all the expenses you are entitled to claim.
As well as this, an accountant can ensure you avoid the headache of the end of year tax return, so you won’t need to worry if you have all the correct information. They can explain anything you don’t understand while helping you make the best decisions for your business.
Best of all, a professional accountant can be flexible, based on your business needs. You can decide whether you need them for just for your annual returns or for more regular bookkeeping throughout the year.
Making the right choice for you
Overall, having an accountant depends on whether or not you are comfortable being responsible for large amounts of money, keeping your books up to date and filing your tax returns on time. It also depends on whether or not you feel confident that you are paying the right amount of tax and if you are taking advantage of your expenses.
If any of this worries you, or if you feel uncertain about any areas of taxation and expenses, an accountant can be an invaluable asset to your small business. Without one, you could potentially spend a lot of time on your taxes that could be better spent on your business, and you could still end up making some costly mistakes.