Do I need an accountant?

[rangi500]

I've set up a limited company to do business through whilst I work in my normal full time job.

At the moment my limited company isn't doing much:

- The company will do about 5 small transactions all year
- I'm not planning to withdraw a salary or dividends
- The company has no expenses

Since there's so little happening, do you think I could get away with not having an accountant, and just keeping the (extremely simple) records myself? What potential pitfalls are there in doing so?

Any help much appreciated,
Rangi

[Joanna P]

Small limited company accounts

You obviously don't need to pay anyone for book keeping, but unless you are familiar with the format of limited companies' accounts that need to be submitted to Companies House you could end up having your accounts sent back! If your records are going to be as simple as you say, you might be able to find an accountant locally who will be willing to put them into the correct format and tend to the Corporation Tax return for a reasonable fee.

I guess shopping around might be an idea. Most accountants will see you for an initial appointment free to give you an idea of what needs to be done and how much it will cost.

Jo

[FarmerPalmer]

You obviously don't need to pay anyone for book keeping, but unless you are familiar with the format of limited companies' accounts that need to be submitted to Companies House you could end up having your accounts sent back! If your records are going to be as simple as you say, you might be able to find an accountant locally who will be willing to put them into the correct format and tend to the Corporation Tax return for a reasonable fee.

I guess shopping around might be an idea. Most accountants will see you for an initial appointment free to give you an idea of what needs to be done and how much it will cost.

Jo

Not really - just look at what your accountant did last year - the companies house website has standard forms that you fill in and it runs checks on them for you before you submit - I've done this for a couple of years.

[SueEllen]

Not really - just look at what your accountant did last year - the companies house website has standard forms that you fill in and it runs checks on them for you before you submit - I've done this for a couple of years.

That would be simple for FarmerPalmer to do.... if s/he actually had the company open for a year.

[hgllgh]

If this is something the OP is doing on the side whilst working in a normal full time job then would he qualify as a sole trader ? A ltdco seems like overkill for 5 transactions a year ?

If you run a ltd co you still need to submit quarterly VAT returns PAYE payments and end of year PAYE (even if they are 'zero' returns) as well as the corp tax return and companies house accounts. If you're starting out then you should get an accountant...

[dude69]

If this is something the OP is doing on the side whilst working in a normal full time job then would he qualify as a sole trader ? A ltdco seems like overkill for 5 transactions a year ?

If you run a ltd co you still need to submit quarterly VAT returns PAYE payments and end of year PAYE (even if they are 'zero' returns) as well as the corp tax return and companies house accounts. If you're starting out then you should get an accountant...

rot.

Why would you register for PAYE and VAT if you don't employ anybody and you are not billing over the threshold? It's not compulsory

[DrGUID]

I've had my own limited company since 2002 and I've got away without having an accountant.

Some tips...

If (like me) you have a day job, get the tax office to close your payroll account.

You don't need to register for VAT unless you have quite a big income (or you have lots of expenses which you can reclaim against VAT)

Take revenue from the company as dividends.

Don't forget to do company house annual filings. Companies house aren't too fussy about your accounts, but the tax office sure will be!

My hardest thing was doing the corporation tax return. Stupidly, each different tax office used to like the form done slightly differently! Fortunately, it's now much easier now it's doable online.

If your company isn't doing anything, you can make it dormant.

[sean]

corporation tax advise

My hardest thing was doing the corporation tax return. Stupidly, each different tax office used to like the form done slightly differently! Fortunately, it's now much easier now it's doable online.

Hi there - thanks for the advise. I'm in a similar situation to the one you talk about, although my ltd part time business has decreased recently, and I'm attempting to submit my own corp tax return, and accounts and computations.

What kind of accounts/computations does the taxman require? I have a profit/loss page; a balance sheet; directors reprot. Do I need anything else if submitting my own short tax return CT 600?

[dude69]

Hi there - thanks for the advise. I'm in a similar situation to the one you talk about, although my ltd part time business has decreased recently, and I'm attempting to submit my own corp tax return, and accounts and computations.

What kind of accounts/computations does the taxman require? I have a profit/loss page; a balance sheet; directors reprot. Do I need anything else if submitting my own short tax return CT 600?

computations, showing how you've worked out the Corporation Tax. That's to add on the non-allowable expenses for CT, and to take off the capital alloances.

[malvolio]

Can I just point out....

VAT Registration is not an optional extra once you pass £64k gross income a year, in fact it's illegal not to do it.

If you don't know that you might just need an accountant for the first year

And if you don't know why sole trader is diffeernt to LtdCo for a small amount of annual business you also need an accountant.

It's not hard to get it wrong. Sadly, HMRC don't treat that as an excuse and will apply the penalties anyway. For a few hundred notes, why not find out what it is you're getting into then make informed decisions, rather than rely on guesswork? After all, people may not be telling you the whole truth.... including me, of course...