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Contracting - Accounts in a mess. Do i need a bookkeeper?

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    Contracting - Accounts in a mess. Do i need a bookkeeper?

    Hi

    I am an IT contractor, one man band. My first Ltd contracting job. Previously i have worked under an Umbrella which was straight forward enough.

    I've been ltd for almost 24 months.

    During this time i was an idiot and was dealing with a gambling problem. (Clean for 8+ Months now)

    I ended up withdrawing from the Business Bank to fund my habit (stupid ****)

    I have pretty much neglected my accounts and have mismanaged them since. I don't know how to go about putting things right. Currently I withdraw 1-2k every couple of weeks without any bookkeeping to pay bills/food/rent. Roughly i should be withdrawing £2k every 4 months.

    I have an accountant who i pay around £80 per month. He sorts out my VAT return and my payslips.

    Other than that he hasn't really provided much input despite asking him directly how i can get my accounts back in order. His advice is not to worry and that it will be sorted eventually...

    **What i want**

    1) I want to go back to running my Ltd correctly. I.e withdrawing the dividend & wage
    2) I want to know how much i owe

    #2
    Originally posted by liy316 View Post
    Hi

    I am an IT contractor, one man band. My first Ltd contracting job. Previously i have worked under an Umbrella which was straight forward enough.

    I've been ltd for almost 24 months.

    During this time i was an idiot and was dealing with a gambling problem. (Clean for 8+ Months now)

    I ended up withdrawing from the Business Bank to fund my habit (stupid ****)

    I have pretty much neglected my accounts and have mismanaged them since. I don't know how to go about putting things right. Currently I withdraw 1-2k every couple of weeks without any bookkeeping to pay bills/food/rent. Roughly i should be withdrawing £2k every 4 months.

    I have an accountant who i pay around £80 per month. He sorts out my VAT return and my payslips.

    Other than that he hasn't really provided much input despite asking him directly how i can get my accounts back in order. His advice is not to worry and that it will be sorted eventually...

    **What i want**

    1) I want to go back to running my Ltd correctly. I.e withdrawing the dividend & wage
    2) I want to know how much i owe
    Simple solution - either change your accountant pronto, or at least ask your current one to provide a little more guidance than they seem to be currently.
    ______________________
    Don't get mad...get even...

    Comment


      #3
      I guess he's not a Free agent accountant? The FA portal will help a lot with understanding your own situation and with some tax planning from your accountant you'll have everything you need. Mine also reviews the portal and my situation every quarter to correct an errors or checks it's working OK for me.

      TBH though the answer you want for your situation because you are in a mess and also have no war chest is 'the absolute minimum to live'
      Last edited by northernladuk; 11 January 2017, 22:07.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by northernladuk View Post
        I guess he's not a Free agent accountant? The FA portal will help a lot with understanding your own situation and with some tax planning from your accountant you'll have everything you need. Mine also reviews the portal and my situation every quarter to correct an errors or checks it's working OK for me.

        TBH though the answer you want for your situation because you are in a mess and also have no war chest is 'the absolute minimum to live'
        FA portal - Where can i find this? - A little new to the site. Happy to do this.
        I think i have reached a point where i should be even in terms of "director loans". But i'm not certain. My accountant is part of a mid-sized firm. He is very knowledgeable, perhaps i'm too small fry for him to worry about?

        I don't know how hard it will be for me to leave him, and have someone else take over.

        I'm hoping my employment situation will change and i will be offered a permanent position at my current firm.

        It will help simplify things at least.

        Yes, i'm pretty much trying to only withdraw when i run out of cash in my current account. It's been a long 24 months!

        Gambling addiction => Very insidious!

        Comment


          #5
          Originally posted by kaiser78 View Post
          Simple solution - either change your accountant pronto, or at least ask your current one to provide a little more guidance than they seem to be currently.
          I hope to become a perm employee in the next couple of weeks, so i don't think it will be beneficial to change accountant.

          Are there certain questions i should ask to my accountant? I am planning to have a sit down some point this month.

          Thanks for your input

          Comment


            #6
            FA is Freeagent.com. Many accountants now offer it as part of their package. It's only a tool and works with good advice but at least you can see your finances. If you are going permie then it's too late for that really.

            It's tempting to get in to your situation on here but I guessing it's very complicated and will need all factors considering when giving advice, particularly if you have thrown permie land in to the mix and talking about DLs etc. I don't it's gonna help you us stabbing at guesses but confidence isn't high in your accountant. Not too sure what to suggest.except talk it through with the account, be very clear what your situation is and get it in writing. You can get a second opinion and also cover yourself.if you get poor advice.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by liy316 View Post
              I hope to become a perm employee in the next couple of weeks, so i don't think it will be beneficial to change accountant.

              Are there certain questions i should ask to my accountant? I am planning to have a sit down some point this month.
              In that case speak to your accountant about winding up the company now. Cite not knowing your liabilities as one reason for wanting to wind up. Ask what they need from you.

              If you still need a vehicle for contracting in the short term then consider going umbrella.

              Comment


                #8
                Whatever bills you get from HMRC that you cannot currently meet (as in when you wind up your company), talk to them. Explain your situation, including the gambling addiction, and let them know that you're keen to get on to a repayment plan to put things right. They'll be far more sympathetic than if you shy away, they send someone round and you have a breakdown there and then in front of a third party debt collector.
                The greatest trick the devil ever pulled was convincing the world that he didn't exist

                Comment


                  #9
                  Originally posted by LondonManc View Post
                  ... and you have a breakdown there and then in front of a third party debt collector.
                  Worse still, you end up on that godawful debt collection "reality TV" show.

                  I'm annoyed on your behalf that your accountant seems to have a head in the sand attitude. They are probably right, it will all work itself out. However, what (I am assuming) you want right now is a bit of hand holding and guidance and being told the details so you have a clear idea what's going on.

                  You have a few things undecided at the moment. You may/may not get that permie job. You need to consider what you will do if the contract ends and doesn't turn into a perm role. Will you stay in contracting, or find another perm job?

                  Assuming you want to quit contacting and get a bit of stability job wise to help your recovery (makes perfect sense to me, contracting itself is a bit of a gamble), I agree with the above suggestion of winding up your company and just using an umbrella. Not as tax efficient but all your liabilities will be known and you can plan how to deal with them. If you end up with a big bill owning to HMRC, do get in touch with them sooner than later to work out a repayment plan. It's far, far better than the alternative.

                  If you decide you want stay in contracting, then I would recommend you consider changing accountants. Give yours another chance to help you, that's what you're paying them for, but if you think they're not delivering there's a huge sticky with discussion about good accountants you can refer to. Lots of people bang on a bout FreeAgent; remember, it's just a tool and while some people think it's the second coming, others (like myself) are happy enough with what they've got (I use Sage Instant Accounts). There's no right or wrong answer, it's simply personal preference.


                  Good luck! And well done for your 8+ months sober.

                  Comment


                    #10
                    To be honest, you'll clear your debts quicker if you can get another year of contracting under your belt. Go really tight on costs and just accept that this is the year that you put things right. Good luck - addictions are horrible, whatever they are and gambling is one that garners little sympathy from people.
                    The greatest trick the devil ever pulled was convincing the world that he didn't exist

                    Comment

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