Doing your own payroll etc instead of an accountant.

[DaveP]

Hi,

Just a consideration of mine.
I'd like to hear from contractors who do there own books,payroll, vat returns etc.

How hard is it ? & where can I learn how to do it myself.

[kingcook]

Hi,

Just a consideration of mine.
I'd like to hear from contractors who do there own books,payroll, vat returns etc.

How hard is it ? & where can I learn how to do it myself.

It's easy enough if you use something like FreeAgent.

The hard bit (at least for me) comes at year end when these need filing: CT600, Company Statement (or whatever it's called), PAYE stuff, etc etc.

Depends how much time you have at weekends I suppose. Do you want to spend every moment of your life working? Or spend bits with the family?

[jamesbrown]

Very inadvisable to not do your books, regardless of whether you have an accountant. Otherwise, how would you spot a mistake? You don't need anything too complex; there are some free Excel templates out there, for example (e.g. SJD have one). As I see it, the main advantages of having an accountant are the knowledge base and the year end returns.

[zedAccounts]

Hi,

Just a consideration of mine.
I'd like to hear from contractors who do there own books,payroll, vat returns etc.

How hard is it ? & where can I learn how to do it myself.

Doing your own payroll is very simple with HMRC's Basic PAYE Tools which are free to use.

You may wish to google zedAccounts to try a free accounting package.

ZED.

[DaveP]

Had a brief look at the demo's of these packages

do any of them calculate a monthly payroll and monthly dividend ?

[philip@wellwoodhoyle]

do any of them calculate a monthly payroll and monthly dividend ?

Freeagent is the closest you'll get to a full package.

It has a payroll function, but you'll still have to do the online filings via the HMRC website (I understand they are planning to introduce payroll online filing in due course).

It will do the VAT return preparation and online filing.

It will provide you with live updated forecasts of amount available for dividends and accruing tax liabilities etc.

It won't prepare your annual statutory accounts nor your annual corporation tax return (I don't think any package will do these).

Of course, garbage in, garbage out - the figures will only be right if you enter your transactions properly -i.e. correct amounts, correct dates, correct analysis, and with a proper understanding of accounting concepts, i.e. accruals accounting etc.

I think the best solution is to do the donkey work yourself, i.e. transaction entry etc., which will drastically reduce the time spent by the accountant, and thus reduce their fees.

[Maslins]

Freeagent is the closest you'll get to a full package.

It has a payroll function, but you'll still have to do the online filings via the HMRC website (I understand they are planning to introduce payroll online filing in due course).

It will do the VAT return preparation and online filing.

It will provide you with live updated forecasts of amount available for dividends and accruing tax liabilities etc.

It won't prepare your annual statutory accounts nor your annual corporation tax return (I don't think any package will do these).

Of course, garbage in, garbage out - the figures will only be right if you enter your transactions properly -i.e. correct amounts, correct dates, correct analysis, and with a proper understanding of accounting concepts, i.e. accruals accounting etc.

I think the best solution is to do the donkey work yourself, i.e. transaction entry etc., which will drastically reduce the time spent by the accountant, and thus reduce their fees.

^^This. With the last paragraph being your own choice. If you really want to DIY everything, it can be done...but not many Ltd Co owners do it, and of those who do, I imagine some will get themselves into a right mess (knowingly or unknowingly!)

[istvan]

I talked with two accountants, one of them a friend of mine. Both of them are running their own limited companies. They are not involved in providing accountancy services to contractors, so they have no conflict of interest in advising me. The advise I got is: keep the books (you always should - you are responsible for your limited). This is 15 to 30 minutes a week for a one man limited. One to five invoices a month, expenses, monthly payroll (same every month - calculated on HMRC's website), quarterly dividends, quarterly VAT (flat rate - simple) and he will do the year end, etc. filings. I ran a limited before, but in the US (nothing can be simpler than a transparent LLC entity). It is a bit more complicated in the UK, but it does not justify 2,000 quids or more a year. It is 2% of 100K - and that is not peanuts. I will be able to say more once I am set up and get some "training" from my accountant friend. A typical contractor accounting service will ask you to do your bookkeeping online, unless you are willing to pay an arm and a leg for them providing it for you. They even make you pay for the software they provide you to do the job. Then they run reports from the software on your data and calculate the payroll, VAT, tax filling, etc. All done by the software. You do 90% of the work for them, if their software is good. Anyway, this is still being investigated by me and I should be able to report on it in a few weeks. No hurry.

[northernladuk]

I would be interested to know what the OP's motivation for this is?

Is it cost? You want to save the company £1200 or so a year or your pocket around £960? Take the cost of freeagent off this as well.

Is it to be more in control of the companies finances... which you should be anyway as you sign for it at the end of the day so you are already legally responsible for it so should be checking everything the the accountant does and directing him as you see fit. He is after all only providing a service...

Or is it because you want greater visibility of every transaction, expense item so you can account for every penny at any point in the year and report on it because your accountant doesn't provide decent tools to do this?

I have been tempted by freeagent from other posters comments but at the moment I find SJD's spreadsheet a godsend and am more than happy with it at the moment. The previous accountant I had didn't give me a single thing, just asked me a load of questions at key points of the year so had to put a lot of effort in to tracking everything with no help. SJD and other accountants also work with freeagent so even if I did use it I probably wouldn't get rid of my accountant anyway.

I can't see any argument why I should stop paying a grand to get it right personally. Spending time on here reading daily posts about chumps trying to do it themselves and don't even know how to put expenses on a P11D or when and how to fill in dividend vouchers against payments so have to ask a bunch of strangers on an internet forum has convinced me of that.

<makes sure Simon D isn't around> although saying all that I do feel put out from time to time when I pay top dollar for accounants that then just ask me to send my spreadsheet in and take the calcs of that... but it works very well and has done for 4 years so am happy to stick with it. I do have an accountant on call whenever I need him and they always answer within a working day so can't complain really.

[DaveP]

Was just curious really.

It erks me that Agencies cream a few quid of contractors cash for doing very little.
So with that same train of thought, I started to think, about my accountancy fees.

And if it saves cash for my business then at the very least it's worth looking at the pro's & con's of doing it myself.