What exactly am I paying my accountant for?

**NickFitz** · 7 July 2008, 19:54

Well, for a start they have the knowledge and skills necessary to tell you if you've made a mistake on your spreadsheet. Presumably they are also ensuring you are paying the correct employer's and employee's NICs and Income Tax. When you take money as a dividend they will ensure that tax on that is handled correctly. And each year they will work out your company tax returns and ensure you pay the correct Corporation Tax, while also advising you of how to legitimately avoid paying more than you have to. Oh, and ensure your company accounts are filed on time at Companies House. Maybe they will also be doing your Self Assessment tax return on time to ensure you don't pay penalties and interest?

Other than that, not a lot, really...

**Gros** · 7 July 2008, 20:04

Welcome to the club mcskiver!

I had similar thoughts to you, and after almost a year I decided to go it alone. Sure, the S.A. returns and corp returns may prove to be a bit of a headache, but I'm having fun learning it all. I figure that once you've done it once, the next year will be all the simpler. You just have to do a lot of reading on this great forum!

I guess a lot depends on personal situation. Mine is pretty straightfoward, so I reckon I can handle it. If not, I'll only have myself to blame

**mcskiver** · 7 July 2008, 20:19

Nick - I don't need to be told that an accountant knows about the law with regards to tax, in the same way that I wouldn't try to tell a client of mine what i'm an expert in. The fact remains that I genuinely wondered where my role should end and my accountant's begins, that's all.

You say they're ensuring I pay the correct taxes, but at this stage they aren't doing that at all because they're entirely reliant on my completion of these spreadsheets. Therefore any assessment of Corporation Tax (for example) will be based on a set of figures i've calculated. I've mentioned to my accountant several times that i'm not confident i'm 100% correct on my calculations, and I thought employing an accountant would remove this responsibility from my shoulders.

Thanks for the response Gros - not sure i'm ready to take on those year end returns at the moment! I might just go for a local accountant. Even meeting someone in person to go through your concerns is a lot better than intermittent e-mail contact with a remote accountant.

**Gonzo** · 7 July 2008, 20:22

Originally posted by Gros View Post

I guess a lot depends on personal situation. Mine is pretty straightfoward, so I reckon I can handle it. If not, I'll only have myself to blame

I have a question for you. Do you know what the implications are for you and your company if you do make a mistake with any of the interactions with HMRC and Companies House?

I had similar thoughts to you, and after almost a year I decided to go it alone. Sure, the S.A. returns and corp returns may prove to be a bit of a headache, but I'm having fun learning it all. I figure that once you've done it once, the next year will be all the simpler.

That is provided the rules don't change from one year to the next. Of course, that would never happen would it?

In my view, it really is not worth the effort attempting to DIY your accounts, and could prove to be a very expensive false economy.

**Archangel** · 8 July 2008, 06:36

I started contracting in 1988, and have always done all my own PAYE, VAT, Dividend Calcs, Self assessments, company tax yearend P35, P11 etc etc

I still use an accountant to do the company yearend, and pay him approx £850

Does this tell you anything.

To the OP. Most of the work the accountants do will be at tax yearend and company yearend, in between there is not much for them to do (VAT returns are easy peasy). I'm not really sure what you require from them? What do you spend so long doing each month that takes a whole day? Doing all my books myself takes approx 1 hour per month. Surely its just a case of "fill in SJD spreadsheet with 8 figures, transfer salary, transfer net dividend, transfer expenses, done"?

**NickNick** · 8 July 2008, 07:18

Originally posted by Gonzo View Post

In my view, it really is not worth the effort attempting to DIY your accounts, and could prove to be a very expensive false economy.

A contractor friend of mine is finding this out for himself at the moment. He's a bit of a cheapskate and even thought he's on a grand a day plus exes at the moment he refuses to fork out the 75 a month for an accountant. His affairs are all over the shop and I'm pretty certain that he is a classic candidate for a nasty investigation. And from what little* I know about IR 35, all of his contracts are caught by it and yet he still carries on as if he is above it. I've tried warning him, but he wont listen, here's hoping that he satys in the clear.

NN
*I actually feel fairly well versed in working out if I'm in or out of IR35 but wouldn't claim to be any sort of expert in it.

**simondolan** · 8 July 2008, 07:43

Hi,

The thing to remember is that whilst our fees are paid monthly, the work we do isn't spread out evenly during the course of the year. With a traditional accountancy practice you would get a relatively small bill once a quarter for the things like VAT, general advice, letters and so on, and then a large bill at year end for completion of the accounts, annual returns, tax returns, personal tax returns and so on. The nice thing with a monthly bill is that you know how much you will be spending each month.

Could you do it all yourself and save the fees? I think that given enough time and research potentially you could - just depends on how much you value your time, and how much research you want to do. I reckon that given enough time and research I could probably rewire my own house and save the electricians bill but I'm certainly not going to try!

Originally posted by mcskiver View Post

Hi,

I made the jump from PAYE to Ltd contractor in February of this year, and went with SJD as my accountant simply as they seemed a safe bet.

Since then i've found my accountant quite personable, but I don't actually seem to get anything from them. I have to complete my SJD spreadsheet where I enter all of my transactions, balance my accounts in terms of expenses etc. I have to work out what dividends can be paid etc, and i'm now in a situation where every few weeks i'm spending an entire day going through receipts and my spreadsheet to work out what's what.

I understand there's a certain amount of work on my part, but SJD have done two things for me in that period: register me for VAT, and send my spreadsheet back to me telling me i'd made a mistake - and only I could work out what that was!

This isn't a criticism of SJD per se (although their fees led me to expect rather more in return), but am I just misunderstanding what accountants do? At this stage it seems I should just get a local accountant for around £100 a month less than SJD, and who has time to meet up with me to work these things out.

Any suggestions - am I just failing to understand what i'm paying for....? I thought an accountant would help me ensure I pay the correct tax etc, but all they seem to do is look at the spreadsheet which i've filled in, and tell me it's right or wrong!

**Moscow Mule** · 8 July 2008, 07:45

Originally posted by mcskiver View Post

This isn't a criticism of SJD per se (although their fees led me to expect rather more in return), but am I just misunderstanding what accountants do? At this stage it seems I should just get a local accountant for around £100 a month less than SJD, and who has time to meet up with me to work these things out.

SJD charge approx £100 a month, so where are you going to find an accountant to do it for free?

It helps me to think of it as £1200 a year, which I pay monthly. There's a lot of work to do at year-end (company and personal) which is offset by the lack of work they have throughout the rest of the year.

**AZZIK** · 8 July 2008, 07:56

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 month 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.

What exactly am I paying my accountant for?