starting out: accountancy advice

[camelCase]

I have a few questions about starting out contracting. Sorry if they've been asked and answered before but I couldn't find any existing threads that looked relevant.

So. I'm just about to go from a premy job to a job as a contractor. I've been advised that I would be best off operating as a Ltd Co. and have been contacted by a couple of accountancy firms offering their services.

Questions I have - as a rookie is it worth paying for the 'we do it all for you' package? How hard is it to register your own company? Should I be paying £90-£120 for this when there appear to be other websites you can do it yourself for £5? Am I right in thinking this cost can be put thru the Co as an expense?

Am I best off organising my own things like indemnity insurance, hiring a private accountant etc. or will that be more hassle than its worth when first starting out?

What is other peoples experience of the large accountancy firms who offer these services to the contract market? Is it worth paying £200+ a month for a delux package initially if you've not much idea what you're doing? Or are these firms just preying on folk like me who are a bit nervous about taking the plunge into contracting? The firm I've been talking to so far is Parasol (Clear Sky). The services seem appealing, but the prices are high.....

thanks for any advice you might have!

[Wanderer]

I have a few questions about starting out contracting. Sorry if they've been asked and answered before but I couldn't find any existing threads that looked relevant.

Did you read the first timers guide? It answers a lot of questions.

Questions I have - as a rookie is it worth paying for the 'we do it all for you' package?

In my opinion, yes. If you don't then you can make mistakes that cost you thousands in avoidable tax or even fines for messing it up

How hard is it to register your own company? Should I be paying £90-£120 for this when there appear to be other websites you can do it yourself for £5? Am I right in thinking this cost can be put thru the Co as an expense?

If an accountant is charging that much then it is probably worth shopping around. To be honest, I don't think price is much of an indicator of quality these days. Yes, it is a company expense. I would be inclined to say DON'T set up the company yourself, just find an accountant who will advise you and do it for you for a more reasonable fee.

You will also need a company bank account - an accountant will help you with this and save you a bit of hassle. Depends on how much your time is worth..

I'm with one of the big PCG recommended accountants at the moment and (rightly or wrongly) I get the feeling that people are put on a conveyor and they don't really give personal service.

What is other peoples experience of the large accountancy firms who offer these services to the contract market? Is it worth paying £200+ a month for a delux package initially if you've not much idea what you're doing?

Depends what's in the package. The PCG charge about £160 for a package including accountant and various insurances etc and they are probably a reasonable choice to get kick started.

You might want to talk to one of the smaller accountant practices, there are some really helpful accountants who take time to post here.

Insurance has been discussed at length, do a search and you will find who the popular insurance providers are.

Good luck!

[MintyBloke]

What is other peoples experience of the large accountancy firms who offer these services to the contract market? Is it worth paying £200+ a month for a delux package initially if you've not much idea what you're doing?

Having used one of the c. £100/month accountancy firms often recommended on here, you need to be aware that the responsibility is still yours for any mistakes they make (and in my case they made many) so you will need to be on the ball and check everything they do. My experience was of an impersonal conveyor belt style service where one size fits all and it was very much reactive rather than proactive. They also had a high turnover of staff which meant it was impossible to build any kind of relationship.

If you are going to be paying more than this then make sure that the level of service warrants it and is tailored to your specific needs. If your affairs are straight forward then a conveyor belt service may be fine for you subject to you putting in the necessary effort to check what they do.

[malvolio]

I have a few questions about starting out contracting. Sorry if they've been asked and answered before but I couldn't find any existing threads that looked relevant.

So. I'm just about to go from a premy job to a job as a contractor. I've been advised that I would be best off operating as a Ltd Co. and have been contacted by a couple of accountancy firms offering their services.

Questions I have - as a rookie is it worth paying for the 'we do it all for you' package? How hard is it to register your own company? Should I be paying £90-£120 for this when there appear to be other websites you can do it yourself for £5? Am I right in thinking this cost can be put thru the Co as an expense?

Am I best off organising my own things like indemnity insurance, hiring a private accountant etc. or will that be more hassle than its worth when first starting out?

What is other peoples experience of the large accountancy firms who offer these services to the contract market? Is it worth paying £200+ a month for a delux package initially if you've not much idea what you're doing? Or are these firms just preying on folk like me who are a bit nervous about taking the plunge into contracting? The firm I've been talking to so far is Parasol (Clear Sky). The services seem appealing, but the prices are high.....

thanks for any advice you might have!

Quick advice?

a) READ the guides here and on www.pcg.org.uk properly. You have no idea how much you don't know

b) Take a look over here - Join PCG | PCG - and look at startup membership. The time to start haggling is next year, when you know what you're doing. Bear in mind that PCG is not-for-profit.

c) Set all your views on pricing against safeguarding a 3-month contract value of around £20k. Does it still look expensive?

d) Remember you're making all yuor own decisions. Advice is usually worth what you pay for it.

[IR35FanClub]

I've kept my own accounts using spreadsheets for the last few years and used an accountant to produce the end of year stuff. I made a few cockups last year with late filing so I'm trying Free Online Accounting Software | Accountants | Crunch. I wouldn't given them a recommend yet as I've not been with them long enough, but I like the way they work... By having all your expenses and invoices in their system there's no manual year end paperwork and totting up to do - and they can just view it and sign it off. Plus you can view your VAT liablilties, CT liablitles, do the payroll etc and they can do the submissions for you. Not bad for less than what I used to pay just for the end of year figures - plus payments are spread over the year. Ok this is now sounding like an advert - but check them out, and see if anyone else on here has tried them. I was put on to them when asking some of the other contractors at work if they'd tried online payroll solutions. I hadn't even thought online accounting solutions existed. the only disappointment I've had is the "automatic" bank reconciliation - but that's more because the format my bank does electronic statements in - doesn't have the running balance. Instead of their software doing everything automatically I had to create a spreadsheet, add a few computed columns and re-export the csv. Nothing too tedious.

[Clare@InTouch]

I'd suggest you call a few firms and chat to them, and compare the services on a like for like basis. It's important not only that you get everything you need, but also that you get a good feeling about the people you're dealing with. You need to be happy that you're able to call with questions, and that you get on with your dedicated accountant.

As Wanderer says, price isn't always an indication of value or service level. Call a few and see what your gut feeling is.

[Jeremiah@RHJAccountants]

My advice is always to call a few accountancy firms and see which one feels best for you as having a good working relationship with your own accountant is key.

I would also make sure you have one main point of contact as no one like to be passed onto a different person each time you call or e-mail.

As already mentioned you can do a search for insurance or speak to an accountant as i am sure they can advise on some providers as i do advise my clients.

The accountancy fee is a tax deductable and prices will vary but you should choose the best service to fit your needs.

A low price might not always mean a bad service and a high price might not always mean a good service and vice versa.

[Contreras]

Most important thing is you feel comfortable dealing with them. And the level of control vs. hand-holding. This is more subjective than a tick-box list of services and pricing.

You don't necessarily need a contractor specialist accountant, but definitely someone who has a good number of contractors on their books. Some testing questions about appropriate salary levels, IR35, and how to best extract money from your company would be a good start, even if you have already figured out the answers to these. Other questions to ask:

What do I need from you?
What do you need from me?
What will you do for me?
What can (should) I do for myself?
How much will it cost?

As for company formation, bank account and (optionally) insurances I would say set these up yourself unless you are feeling lazy or stuck for time. These are all straight forward and you can still make use of your account to put any questions to.

Another recent thread here: http://forums.contractoruk.com/accou...ccountant.html