Is an accountant mandatory for a limited company

[bkiyer]

I am sure you are right. Just about a week ago I got my limited company registered for just GBP 25.00 ( IYYO Ltd). I got several quotes from accounting companies ( many of them advertise at contractoruk & pcg ) and individuals for 125.00 GBP which they said "special offer price".

Once I got my company registered I got quotes for domain names. They are "special price at GBP 59.00 for 2 years" where you can get a domain name for GBP 7.00 for 2 years. I grabbed almost all the domains for www.iyyo.*

Makes me think, we could get more money or atleast the same with our own accounting.

[4Contractors]

Good luck !

Ask me about registering domain names and I would tell you 123-reg.co.uk - £6.09 for 2 years.

Ask me about accountants and because I can't blatantly advertise I would say couldn't possibly comment.

Ask me about the 20% of accounts that needs professional knowledge I would say dividend management, online paye, end of year accounts, share ownership, address changes, etc. The first thing my accountant did when I transferred from JSA was save me £600 by encouraging me to claim VAT on fuel going back 3 years. Perhaps some individuals have all the answers - I certainly don't and am not arrogant enough to pretend I do. I double check all my accountancy figures after the JSA experience where many errors were made - I think it's better to have 2 people go through my accounts each year.

Ask me about Xoggoth and I would say they broke the mould.

[Capn Graybeard]

was save me £600 by encouraging me to claim VAT on fuel going back 3 years

Interesting that I had to tell mine to claim based on discussions here many moons ago - and they are a "specialist contractor accountant".

Just goes to show that putting all your trust in an accountant is not always the best way to go!

I'm with Xog on this - if you can do it yourself (and are prepared to do the reading, etc.), then why waste money on an accountant.

[silicondale]

expensive and unnecessary

Ask me about the 20% of accounts that needs professional knowledge I would say dividend management, online paye, end of year accounts, share ownership, address changes, etc. The first thing my accountant did when I transferred from JSA was save me £600 by encouraging me to claim VAT on fuel going back 3 years.

All of those things you can do yourself. Even dividend management, especially now that there isn't any advance corporation tax or dividend tax credit to bother with. End of year accounts - just work with the same template every year and you can't go wrong. Online PAYE - the Inland Revenue system actually does work well and gives all the help you need. Share ownership, address changes, etc - the Companies House forms are simplicity itself to fill in.

As for saving £600 on VAT on fuel - how much has your accountant charged you so far ? I'd like to bet it's well in excess of £600. So he pocketed all your savings.

I've done my own company accounts for the 11 years since I set up the company. Yes, did make a mistake or two over calculating depreciation at one stage - but re-calculated and put in a correction later. The problem didn't affect the tax so the Inland Revenue weren't at all bothered about it.

I would say that unless either (a) your company's finances are horrendously complicated, or (b) you're a complete dummy, you really do not need an accountant. It's not that time consuming (a couple of hours a quarter for the VAT, and a day or so at end of year accounts time). I also do not use accounting software. Why buy and learn a new package that you're going to use so infrequently ? Hand-written ledger and calculator is all it takes. You also get to understand what's going on much better if you do your accounts by hand.

[4Contractors]

Re: expensive and unnecessary

The accountant saved me £600 within the first month of being with them and as their monthly fee is £50 + VAT your point is not very useful.

What are you going to do about online PAYE to earn your £825 over five years without buying software ?

How did you hear about flat rate VAT ?

Who reminds you about the various returns and takes full responsibility if they are not filled in on time and correctly ?

Who would you contact if you moved house ?

Who checks your figures and deals with accountancy issues when you want a 2 week break ?

How many hours a hear do you spend dealing with accountancy issues ?

You may be excellent at doing your own accounts but you would be are a rarity. Most contractors cannot even be bothered to run a limited company and we all know how easy that is, particularly when our accountant sets it up for free.

The majority of applications and takeups through our website are for the Umbrella option, which astounds me. Most contractors would be well advised to use the limited company/accountant option - I don't think people can be bothered nowadays.

You try and persuade people to do their own accounts - good luck sir. Perhaps you would like to stay on the forum as I do and answer a few of their questions.

[xoggoth]

Re: expensive and unnecessary

Actually greybeard and grey horned one I do not necessarily recommend doing your own, see first comment above. If I was earning a decent wack and could find a reliable accountant I would much rather pay him to do the whole darn lot inc. VAT and PAYE and find something better to do with my time at weekends. I just say that if you are prepared to put in the time it isn't all that difficult.

Also the risks are not great. Apart from IR35 and settlements (and there is insurance for those) all the greyest areas, what you can claim for heat and light etc, are about rather small things and there is no great financial impact if you get them completely wrong.

Re your claiming fuel Rhino, I had same experience. But why didn't the accountant I was previously paying for advice tell me that? Had I bothered to check what I could claim on a company van myself it would not have happened. One of many omissions and errors by professionals I have mentioned on several occasions.

[4Contractors]

Re: expensive and unnecessary

Well Xogg JSA are a large firm of specialist accountants who omitted to tell me about the VAT on fuel. As I was with them for four years I lost out to the tune of £300 as could only claim for the previous 3 years. JSA also charged me a fortune, esposed me to the 1998 expenses global settlement costing me well over £800, missed deadlines, made loads of mistakes and communicated badly. I aslo spend large amounts of my time checking their figures and maintaining their online system of accounts. Not all accountants are this bad as you know.

Silicondale - with flat rate VAT it takes about 5 minutes a quarter to fill out a VAT return. What on earth are you doing for 2 hours - you do know what flat rate VAT is don't you ?

[antagoneyes]

Re: expensive and unnecessary

It's not that time consuming (a couple of hours a quarter for the VAT, and a day or so at end of year accounts time)

silicondale you are an idiot !!

You takes far too long to do your VAT - 8 hrs + end of year = day or so + time for PAYE, divs, other returns = say 25 - 30 hours extra per year and how much do you get paid ?

[silicondale]

time

************ and antagoneyes -

With respect, I don't think I'm that stupid.

Maybe I overestimated the time - what I was trying to say was that it doesn't take much time at all ! And as for payment for that time - I prefer to keep the cash in my own pocket, rather than pay an accountant at rates that are similar to or higher than my own chargeout rates.

As for flat rate VAT, I got all the literature from HMC&E and have gone through the figures and it might just be wiorthwhile my switching - but I run a consultancy, and pay for all my own equipment and consumables etc, so it's not as cut-and-dried as for a typical IR35-caught contractor.

As for online PAYE - since my company has only two PAYE transactions a year (to spouse and self) at the UEL, there is no NIC and no income tax to pay. The end-of-year PAYE returns couldn't be simpler. Who needs software ? The Inland Revenue provide all you need within their online system, which actually is excellent - after the first year or two of teething troubles. I'm not saying that everyone's requirements will be so simple, but even with monthly salary payments that's not exactly demanding. Anyone numerate enough to be an IT contractor ought to be able to handle it standing on their head.

[4Contractors]

Re: time

I didn't call you stupid - just questioned your time figures for VAT.

I do however think you are oversimplifying the service provided by an accountant and would advise others to think carefully before deciding to do their own accounts.

After 11 years of knowledge and experience I would expect you to have things sussed but the hardest thing is being realistic about the learning process and lack of knowledge you would have had all those years ago.

I would be interested to see a proper diary of dates and tasks that a person like you would need to do this job. I think I know a fair bit about contracting, expenses, tax, etc but I do not begrudge paying for professional assistance in this matter......and no my rate is not high enough to waste money.

Experiences with a bad accountant proved to me how stressful things can get if the job is not done correctly.