What exactly am I paying my accountant for?

[lambrini_socialist]

SJD cost the same as Parasol. i'm much much better off now i'm with SJD, get to be in control of my own business but get all the help, advice and admin support i feel i currently need - so it's a no-brainer.

[chris79]

It's far better to know and understand how your company is running and how the finances work. If Mr.Taxman knocks on the door are you just going to say "my accountant does it all"... surely dodgy ground for MSC legislation? (i.e. you are not the person 'managing' the company)? << CORRECT ME IF I'M WRONG ON THIS PLEASE.

If the cost of the accounting is annoying you, then why not consider buying Sage instant accounts and instant payroll? Takes me 10 mins admin a week (if that), print my own payslips, enter the transactions into instant accounts, pay the taxman once every 3 months (online)... it's a piece of piss. Just get an accountant to do your end of year CT600.

[Gros]

Just get an accountant to do your end of year CT600.

Hi Chris. Aren't you contradicting yourself a little? From your previous posts I got the impression you do everything yourself - or do you still pay for the year end stuff to be done by an accountant?

My problem is I want to do it all myself, but have never tackled the year end stuff before, and the general advice coming out here tells me that it's going to be one huge headache. And if I'm going to pay for the year end stuff to be done, then quite frankly it may as cover everything during the year. Which takes me back to where I was before I got rid of the accountant

[Lewis]

Hi Chris. Aren't you contradicting yourself a little? From your previous posts I got the impression you do everything yourself - or do you still pay for the year end stuff to be done by an accountant?

My problem is I want to do it all myself, but have never tackled the year end stuff before, and the general advice coming out here tells me that it's going to be one huge headache. And if I'm going to pay for the year end stuff to be done, then quite frankly it may as cover everything during the year. Which takes me back to where I was before I got rid of the accountant

I would say the same as the others. I feel very confident with PAYE, VAT, Corp Tax, Self Assesment, Dividends, basically the mid year stuff. In fact I did most of the company setup myself (registering for VAT, PAYE, Corp Tax etc..) after being dumped on by my old MSC. But I let my accountants do the end of year CT600 and end of year accounts including abbreviated accounts for companies house. I think it would have been a lot of work for me to do those and I am pretty sure I would have made a mistake somewhere.

[chris79]

Hi Chris. Aren't you contradicting yourself a little? From your previous posts I got the impression you do everything yourself - or do you still pay for the year end stuff to be done by an accountant?

My problem is I want to do it all myself, but have never tackled the year end stuff before, and the general advice coming out here tells me that it's going to be one huge headache. And if I'm going to pay for the year end stuff to be done, then quite frankly it may as cover everything during the year. Which takes me back to where I was before I got rid of the accountant

Not at all mate, I do all my own accounting, apart from my company year end (CT600). From my own experience:-

1. Doing your own books, easy. I use Sage instant accounts, enter money in, enter money out, simple.

2. Doing your own payroll, easy. I use Sage instant payroll, set up an employee, tell it how much you want to pay them, weekly, monthly etc, and it generates you a weekly payslip, you just transfer the net pay amount from your business account into your personal account.

3. Paying the tax man, easy. Sage payroll produces your quarterly PAYE/NI amounts per employee, just take the quarterly figure, login to the HMRC portal, enter your PAYE referece number etc and pay the amount owed using your business account debit card.

4. Claiming expenses, easy. Just keep the receipts etc and transfer the amount from your business account to your personal account. Mark it under the correct leger code (basically just a numbered category which things fall under) in Instant accounts.

5. End of year payroll, easy. Sage send you a booklet (if you subscribe to their support package, it's about £100 or so a year) which tells you step by step how to run your own payroll year end and send in your P35 (it does it online for you). Took me about an hour to do mine back in April. They also send you a CD with the latest legislation updates on etc for the next tax year.

6. VAT - not sure yet as I'm awaiting registration.

7. End of year, I'm paying an accountant £350 to do my year end which is basically your corporation tax. From what I can gather it's a bit of a more involved process as there's things like your company year can span 2 different tax years (e.g. 20%, 21%) etc. There's a formula to work this out though. Also depreciations etc need to be considered etc, I was tempted to just do this all myself, but for now I think I'll just pay it.

All in all I prefer to do my own accounting, was a bit of a learning curve to begin with, but now it's all setup it's a doddle. Just gotta file everything (get a small filing cabinet or so) and be maticulous with everything. Check your instant account balance matches your business account balance every week etc and you can't really go wrong. I'm always of the opinion that HMRC are not going to come and shoot you down for making a simple mistake if you do, they are pretty much all for helping out small businesses etc.

[Nixon Williams]

Nixon williams are good and charge less I have been with them for over a years. I provide my invoice and expenses and tell them what salary I want to be paid. They do the rest. They calculate the paye, vat, corp tax, etc and tell me when it is due. When I want to take a dividend I just call them up and ask how much profit I have in my account that I can declare as a dividend. Then I take out how much I want. They are quite good and I have no complaints so far plus they charge me 70 quid a week and that includes annual accounts and tax return.
I spend about 2 hours a month if that depending on how much I need to do.

I think you will find that we charge £70.50 per month! - this works out as £60+VAT per month.

Using a spreadsheet system is fine, although as this means less work for the accountant, this should be reflected in the fees that you pay.

Alan

[mcskiver]

Couple of points to come back on, because I think i've maybe been misunderstood.

Firstly, SJD cost around £120 a month, and i've been informed by friends who have their own businesses they pay something in the region of £20-30 per month to their accountant, including end of year stuff. This may not be exactly £100 cheaper per month than SJD, but it's pretty close, so that was where that figure came from.

Also, my friends (who aren't IT contractors, but run other small businesses) seem to be in a position where they pass on summaries of expenses etc to their accountant on a monthly basis, and the accountant advises them on how much they should take as dividends and when etc, in addition to calculating taxes taken etc. So they don't complete anything as detailed as the spreadsheets I complete for SJD, which perform all of those calculations anyway, assuming I get the figures right (which is why I wanted an accountant, not a spreadsheet).

I'm now in a situation where i've made some mistakes, and I have to find time to work through my statements, spreadsheets etc to work out where these have come from. I wouldn't mind, but I thought this work would only be for me to do if I paid an accountant just for year end stuff.

Please understand, i'm not claiming that accountants don't know what they're doing or that I know better. My original post was basically asking - shouldn't I be able to pass on this work around these calculations to my accountant? It seems not!

The fact that it takes me so much of my spare time is precisely because I don't know what i'm doing, and I don't want to "rewire my own house" (thanks Simon, for that helpful analogy. ), but I feel like I am doing, and then paying an electrician to come in at the end and tell me i've done it wrong....!

Anyway, I think i've got some of the answers I need, so thanks for the responses. In summary, this is what SJD do for the money, and most of you are happy with that. Clearly most of you are generally more comfortable dealing with your taxes and finances than I am too, so that's my weakness!

I might find someone locally who can effectively hand hold me through the various processes. I'd like to get a better understanding of what's involved, but at the end of the day there's too much at stake for me to do my own accounts, it's really not something I want to do as a DIY project!

So thanks again guys for the feedback.

[EvilWeevil]

If the cost of the accounting is annoying you, then why not consider buying Sage instant accounts and instant payroll?

Or downloading Microsoft Accounting Express for nothing, and use the HMRC employer's CD for payroll.

I think buying Sage and their support package probably works out nearly as expensive as having an accountant. And I find accountants are much less irritating.

[chris79]

Or downloading Microsoft Accounting Express for nothing, and use the HMRC employer's CD for payroll.

I think buying Sage and their support package probably works out nearly as expensive as having an accountant. And I find accountants are much less irritating.

Well that's a fair point I guess, I did consider using HMRC's CD but to be fair I do like Sage as a product.

[Sausage Surprise]

Nixon williams are good and charge less I have been with them for over a years. I provide my invoice and expenses and tell them what salary I want to be paid. They do the rest. They calculate the paye, vat, corp tax, etc and tell me when it is due. When I want to take a dividend I just call them up and ask how much profit I have in my account that I can declare as a dividend. Then I take out how much I want. They are quite good and I have no complaints so far plus they charge me 70 quid a week and that includes annual accounts and tax return.
I spend about 2 hours a month if that depending on how much I need to do.

WHS (except it's £70.50 per month) I have 2 colleagues who also struggle with the SJD spreadsheet and seem quite miffed at the service I obtain from NW.