When budgeting for the year, one of the recurring costs accounted for is accounting fees for your small business. Your thoughts may naturally wander off to - ‘Do I really need an accountant?’ or ‘Should I DIY?’. In reality, your accountant will be tasked with a series of reporting responsibilities which you are legally obliged to fulfil, alongside submitting your tax returns.
The service delivered by your accountant will depend on the level of service you are paying for, many accountancy firms rank the level of support on offer from silver, bronze, gold or basic, premium and extended. Expectations will also vary depending on the type of accountant you are paying for, such as online-only, specialist or high street. A digital-only accountant may complete your paperwork and cap the level of support available, whereas a dedicated accountant at a leading contractor accountancy firm may offer unlimited advice and access to industry-standard accounting software.
The service level required will also change depending on your employment status, as a limited company director will typically have more administrative duties than a sole trader.
I’m a limited company contractor – what can I expect?
If you’re the director of a limited company, you may opt for a specialist service from a contractor accountant. This type of accountant will typically offer an all-inclusive package which is tailored to the services required by contractors, but there are also options to pay for less support or more support. The services required by a contractor operating through a limited company, excluding any personal requirements typically include:
- Preparation and submission of Year-end Accounts
- Preparation and submission of Annual Returns
- Corporation Tax
- Administration of Dividends
- VAT Management: Including registration to Flat Rate VAT Scheme, if applicable
- Financial Health Check: This consists of assessing the payment structure of the business to ensure that you’re operating as tax-efficiently as possible
- Making Tax Digital compatible platform, i.e. cloud accounting software
A specialist contractor accountant from an established or local firm will typically assist you with the onboarding process by requesting professional clearance from your former accountant and transferring your financial data, ensuring that the switchover process is swift. If your package includes a subscription to online accounting software, your accountant will typically set-up your profile and offer ongoing support through the platform. Your accountant will also be expected to deal with HMRC and Companies House queries on your behalf.
If you are new to contracting and require a limited company, you will need to register this at Companies House which is step 7 in our limited company checklist. You will need to check availability for your company name, and your accountant will typically take care of the rest, including incorporation documents.
Company Bank Account
Your accountancy firm will typically have a list of referral companies for business bank accounts, contractor insurance, pension advice and financial services. If your accountant is part of a distinguished firm, they may have an agreement with a host of bank account providers. As a result, they may be able to assist you with the application process, provide a dedicated helpline direct with the provider and actively help with any issues relating to your business account.
Knowledge, expertise and industry updates
If your accountant is part of a proactive accountancy firm, they will provide ongoing updates on legislative measures, industry updates and key topics affecting the industry, such as the IR35 private sector reform and Making Tax Digital.
Operating a limited company can be challenging if you’re a first-timer as you will be responsible for the submission of financial reports and the ongoing maintenance of the business as the company director. Partnered with an experienced and reputable accountant specialising in your sector can unload the burden, helping you stay focused on winning work and outperforming projects.
Handpicked Accountants can connect you with a reliable accountant in your local area. Use our search tool to check for highly distinguished accountants near you or get in touch with a member of the Handpicked Accountants team on 0800 063 9258 for a personal recommendation.