DIY payroll and accounting until MSC dust settles

[Lewis]

Hi, I assume I am not alone in my predicament ...

I moved from Ltd co to GIANT about 2.5 years ago just to reduce admin burden and it worked well I thought. I was going to move to Trailblazer but we all know happened there. So, I've decided to continue down the Ltd co route (as I'm not caught by IR35) so I've sorted a new contract, insurances, bank account etc. for the company Giant setup. Now all I need is an accountant and I'm back in business.

I have read so much about which accounting companies are ok and which aren't and spoken to QDOS, my agent etc.. most people seem to think that the likes of SJD etc. will be fine but I'm wary of joining until the dust has settled a bit and I know for sure they will not be targetted by the IR.
So am thinking of doing my own accounting for a few months. From what I remember from years gone by, I just need to consider the following:

(1) PAYE - have registered today, will pay myself monthly and calculate tax using sage instant payroll (about £80+VAT) - or I could do by hand I guess.

(2) VAT - VAT pending so nothing to do for a few months there, VAT returns were fairely straightforward as I recall anyway. Will go flat rate and invoice for backdated VAT when registered.

(3) Expenses - keep records and receipts, write myself a company cheque every month.

(4) Dividends - Declare each quarter (write the minutes and div certificate) - I can't remember if I need to send any Corporation Tax (I think that's just at year end)?

(5) Ensure I have an accountant by year end (or be brave and buy sage instant accounting and do my own year end)

Have I covered everything? Is anyone else thinking the same? Any warnings against this idea?

Thanks
Lewis

[malvolio]

Why do we have to keep answering the same old questions, I wonder...?

Do not confuse cost with value. We regularly advise people to use an accountant. We consistently recommend the same set of companies.

Why do you think you'll get a different answer now?

And we tend to think that people who use(d) MSCs for an easy life are rather missing the point of being a contractor, but we'll let that one go

[dmini]

Anyway - you dont need to buy Sage payroll
HMRC provide a CD that does the calculations when you register as a new employer - you should get it really soon. Doesn't produce a payslip, but thats minor.
I know two small accountants that use the HMRC CD in preference to the "chargable payroll solutions" such as sage

[PAG]

You said in your post that IR will not go after the companies like SJD or other equivalent accountace firms ... then you are saying to be on safe side better to do the accounting myself for few months !!!! contradicting yourself.

IR will NOT target accountacy firms !!! they have said that clearly.

Having an accountant for your Co is the best option for you. Also the earlier the better.

[philip@wellwoodhoyle]

There is no need to "wait for the dust to settle". There is NO PROBLEM with using a proper accountancy practice to do your books, payroll, vat or anything else. There was a bit of scaremongering but there was absolutely no substance to it.

IT contractors are no different to lots of other business types. Whilst we have a lot of IT contractor clients, we also have lots of other client types, such as hotels, shops, farms, ISPs, wholesalers, manufacturers, dentists, joiners, etc etc. Some of these varied range of clients pay us a monthly package fee and we do their payroll, VAT, book-keeping etc. It is standard practice for an accountant to be asked to do payroll, book-keeping and VAT returns by ANY client engaged in ANY business sector, where the client don't have the time or inclination to do it themselves and can't justify an in-house employee to do it.

The ONLY firms/clients that need to worry are those using the old MSC providers who have tried to re-brand virtually the same service that was outlawed by the recent change in legislation. Some of these providers were clearly trying to use the same internal systems and procedures as previously and were continuing to offer virtually the same service with a few technical differences. The larger ex-MSC firms would always be first in the firing line when HMRC start looking for investigations - after all, they were the ones that caused the problem in the first place.

[Lewis]

Why do we have to keep answering the same old questions, I wonder...?

Do not confuse cost with value. We regularly advise people to use an accountant. We consistently recommend the same set of companies.

Why do you think you'll get a different answer now?

And we tend to think that people who use(d) MSCs for an easy life are rather missing the point of being a contractor, but we'll let that one go

With respect, I've been contracting for over ten years, with a Ltd co for over seven. I'm not missing the point of contracting at all. Giant's MSC was an easy life but what's wrong with that. I'm not into creating work for myself just for the sake of it and I had no expansion plans that required a Ltd company of my own. I was just being pragmatic.

As for answering the same old questions, I am a Shout99 reader and have only just started reading this site and so I apologise for asking a repeated question. If you know of previous threads like this I would appreciate the links (I will do a search myself shortly).

My understanding is that it's no longer black and white that an accountancy firm that deals with lots of contractors is going to be a safe bet. Otherwise I'd just join SJD who have been highly recommended to me. So whilst I wait for the dust to settle I was thinking about doing my own accounts. I have read a few other posts which suggest other people are thinking the same, which is why I thought this might be an interesting topic.

I don't mean to be argumentive but I resent the implication that I am not a 'real' contractor just because I am a pragmatic person.

Regards,
Lewis

[Lewis]

Anyway - you dont need to buy Sage payroll
HMRC provide a CD that does the calculations when you register as a new employer - you should get it really soon. Doesn't produce a payslip, but thats minor.
I know two small accountants that use the HMRC CD in preference to the "chargable payroll solutions" such as sage

Thank you. That is very helpful and saved me some cash

[Lewis]

You said in your post that IR will not go after the companies like SJD or other equivalent accountace firms ... then you are saying to be on safe side better to do the accounting myself for few months !!!! contradicting yourself.

IR will NOT target accountacy firms !!! they have said that clearly.

Having an accountant for your Co is the best option for you. Also the earlier the better.

What I said was "most people seem to think that the likes of SJD etc. will be fine but I'm wary of joining ". i.e. I have been advised by a number of people, some professional some not that a large accountancy firm will be ok.

But I'm pretty wary when it comes to the IR and I don't just believe what most people say, especially so recently after this all kicked off. I want to wait a while to see what the IR say! Rather that than join big firm and then a month down the line discovered they are (unjustly in my opinion) being called an MSC. Now I could just join a small local firm but in the past I have had problems with small firms and would rather be with a big player.

Sorry P.S. some people argue that accountancy firms will be targetted. That's what worries me, I don't know who to believe ....

[malvolio]

Okay then...

http://forums.contractoruk.com/thread16145.html
http://forums.contractoruk.com/thread16285.html
http://forums.contractoruk.com/thread16278.html
http://forums.contractoruk.com/thread16224.html

...and those are from the first two pages on this board. HTH

[Lewis]

There is no need to "wait for the dust to settle". There is NO PROBLEM with using a proper accountancy practice to do your books, payroll, vat or anything else. There was a bit of scaremongering but there was absolutely no substance to it.

IT contractors are no different to lots of other business types. Whilst we have a lot of IT contractor clients, we also have lots of other client types, such as hotels, shops, farms, ISPs, wholesalers, manufacturers, dentists, joiners, etc etc. Some of these varied range of clients pay us a monthly package fee and we do their payroll, VAT, book-keeping etc. It is standard practice for an accountant to be asked to do payroll, book-keeping and VAT returns by ANY client engaged in ANY business sector, where the client don't have the time or inclination to do it themselves and can't justify an in-house employee to do it.

The ONLY firms/clients that need to worry are those using the old MSC providers who have tried to re-brand virtually the same service that was outlawed by the recent change in legislation. Some of these providers were clearly trying to use the same internal systems and procedures as previously and were continuing to offer virtually the same service with a few technical differences. The larger ex-MSC firms would always be first in the firing line when HMRC start looking for investigations - after all, they were the ones that caused the problem in the first place.

Thanks for the advice. I get worried when I read things like this .... John Chaplin, Tax Director, at KPMG, says: "Many service providers seem to be relying on the so called accountancy exemption as a reason for not accounting for PAYE/NIC under the proposed MSC legislation. In my view it's naive to believe that the Treasury would allow a loophole whereby PSC service providers could claim that by merely being a member of an accountancy body or employing an accountant that they would be exempt from the legislation."

How will the IR define a PSC service provider. Do you think firms (unlike yours it sounds) that focus solely on (a) setting up Ltd companies for contractors and then (b) doing all their accounting are ok?