Do I need an accountant?

[Gros]

Hi all.

I worked my first year as a contractor last year, under my own limited company. Upon everyone's advice I appointed one of the usual agency accountants that are common on this forum and used them until I quit my position in January. As I knew I was to be out of work for a while I ended the agreement with them as an unnecessary expense.

Now I've started work again (though possibly only for the short term) I face the same dilemma. I'm wondering - what did they really do for me? They gave me a spreadsheet, which once you understand seems to take care of everything you need to know. I still have to spend quite a lot of time filling in the spreadsheet, even if I am paying the accountant too. So here's what they do for me as I see it:

- every quarter, tell me how much VAT to pay
- answer the very occasional question I have
- one day, will tell me how much corp tax to pay.

I'm sure I can work out the VAT myself, and the Corp tax isn't due yet (and is pointed out on the spreadsheet when it is due anyway). I know what salary to pay myself, and how much Dividend I can take to stay below the appropriate tax limits.

So what else is there... is it common for people in my position to handle their own accounts? My position is very simple, the only expenses I claim are travel, and I'm not really bothered about pursuing every single penny I can against tax.

I'm not trying to devalue the role of an accountant - just trying to understand what I've not thought of, or where they could really be of value to me!

Thanks for any advice you can give to help me out.

[Sockpuppet]

A good accountant will save you more in tax than you pay them. Then there are the fines and fees.

I wouldn't be too sure about working out corp tax. Not unless you don't have any capital assets.

Get some good accountancy software (Sage etc) and it will do 99% of the work for you.

End of year find accountant. Hand over sage files, pay £400 receive accounts.

[Gonzo]

No, you don't need one.

But, they make sure that your company stays legal. The rules do change at the whim of the government. Are you knowledgeable enough and have enough time to stay on top of them all?

Probably not, that's why you pay a professional.

[Gros]

A good accountant will save you more in tax than you pay them. Then there are the fines and fees.

But this is where I feel I was losing out with my previous monthly fee accountant. They were just telling me what was evident from the spreadsheet, so I couldn't see that they were saving me anything at all.

End of year find accountant. Hand over sage files, pay £400 receive accounts.

When you say end of year, do you mean end of my personal company year (ie, for me, I formed the company Dec 06, so my year end was Dec 08) or do you mean the standard financial year end?

[Jaded]

I am about to venture into the contracting world and will probably use an accountant, the way I look at it is that whilst I could probably work out what is needed for taxes etc, why bother the amount of time it would take would be far in excess of the fees I would be paying. It is just a matter of which one to go with, I will be starting my research soon.

[chris79]

But this is where I feel I was losing out with my previous monthly fee accountant. They were just telling me what was evident from the spreadsheet, so I couldn't see that they were saving me anything at all.



When you say end of year, do you mean end of my personal company year (ie, for me, I formed the company Dec 06, so my year end was Dec 08) or do you mean the standard financial year end?

He means the company year end.. also it is yearly, so not sure how it can be Dec 06 to Dec 08?

[Gros]

He means the company year end.. also it is yearly, so not sure how it can be Dec 06 to Dec 08?

Yes sorry, I meant 07. I did that one myself online, which wasn't difficult.

[THEPUMA]

It's difficult to tell whether or not you would benefit from an accountant. If you read these boards religiously and are therefore operating in the most tax-efficient manner, then possibly.

If we (using the royal we to represent all accountants) could save you more tax than our fee, then obviously you get your accountancy work for free plus a bonus.

Most people who approach us having dealt with their accounts themselves end up saving a fortune in tax but that is probably unrepresentative because those who are good at it, don't approach us.

If I were you, i'd ring up an accountant and chat through with them your current circumstances. If it sounds like they're going to save you more tax than their fees, sign up. If not, don't.

[Gros]

The problem for me is, it's hard to see where they could make me these huge savings! Like I said, my situation is pretty simple, I charge daily rate, I am on FRS for VAT, and claim a bit in travel expenses. What is there that could suddenly magically save me that much money?

No doubt if my contract continues I will end up with one again, but I may hang in there for a while and try and learn a bit more about it.

[QwertyBerty]

The problem for me is, it's hard to see where they could make me these huge savings! Like I said, my situation is pretty simple, I charge daily rate, I am on FRS for VAT, and claim a bit in travel expenses. What is there that could suddenly magically save me that much money?

If your other half doesn't work you could pay her a salary to do some admin and save some money there.

QB.