Reply to: Contracting - Accounts in a mess. Do i need a bookkeeper?

[SueEllen]

Doesn't sound that serious if the baliffs aren't knocking on your door. Basically let the accountant sort it out at year end. Usually there is no corporate tax owing so, just need to declare withdrawn funds as divis and then it's just a matter of working out your personal tax liability. If you have a permie job should be able to pay it.

Stupid advice.

OP ask the accountant if they have a bookkeeper or office junior who can do your bookkeeping for you. Yes you will have to pay but it's better than being in this complete mess.

You will need to provide them with your bank statements, any receipts you have got business costs and any travel logs.

[jmo21]

Having had experience of a one man band with a very hands off I'd have guessed exactly this. My last guy had no spreadsheets or anything. He advised how much to take which I kept to thankfully and he appeared just to magic the numbers up at the end of the year.

If an accountant is working like this then he can't stop the OP spunking his money away. Even now with my accountant checking quarterly I could still get in to some horrible trouble for 3 months without them knowing. Deffo got the wrong service from his accountant but even with the right one clients can still get themselves in a mess.

To be honest, my accountant is much like this, but I know (pretty much) what I'm doing withdrawal-wise all the time, so not been an issue.

[FrontEnder]

Doesn't sound that serious if the baliffs aren't knocking on your door. Basically let the accountant sort it out at year end. Usually there is no corporate tax owing so, just need to declare withdrawn funds as divis and then it's just a matter of working out your personal tax liability. If you have a permie job should be able to pay it.

This is pretty terrible advice all round.

Bailiffs knocking on the door is not the point at which you should get your tulip in order.

"Usually there is no corporate tax owing so, just need to declare withdrawn funds as divis and then it's just a matter of working out your personal tax liability" makes absolutely no sense. If you're paying dividends, there needs to be profit, so there will be corporation tax owing.

"If you have a permie job should be able to pay it" - You have no idea what he will owe, what this permie job will be paying or what the his personal expenditure is. How on earth can you say that he'll be able to pay it.

[BlasterBates]

Doesn't sound that serious if the baliffs aren't knocking on your door. Basically let the accountant sort it out at year end. Usually there is no corporate tax owing so, just need to declare withdrawn funds as divis and then it's just a matter of working out your personal tax liability. If you have a permie job should be able to pay it.

[northernladuk]

I am guessing the accountant means/plans to do is to simply "do the accounts" at some point after year end when they have all your bank statements etc, which will involve classifying lots of "withdrawals" as dividends, and then telling you how much you owe in personal tax.

You'll need to be much more forceful to get them to do anything else.

Having had experience of a one man band with a very hands off I'd have guessed exactly this. My last guy had no spreadsheets or anything. He advised how much to take which I kept to thankfully and he appeared just to magic the numbers up at the end of the year.

If an accountant is working like this then he can't stop the OP spunking his money away. Even now with my accountant checking quarterly I could still get in to some horrible trouble for 3 months without them knowing. Deffo got the wrong service from his accountant but even with the right one clients can still get themselves in a mess.

[jmo21]

I'm annoyed on your behalf that your accountant seems to have a head in the sand attitude. They are probably right, it will all work itself out. However, what (I am assuming) you want right now is a bit of hand holding and guidance and being told the details so you have a clear idea what's going on.

I am guessing the accountant means/plans to do is to simply "do the accounts" at some point after year end when they have all your bank statements etc, which will involve classifying lots of "withdrawals" as dividends, and then telling you how much you owe in personal tax.

You'll need to be much more forceful to get them to do anything else.

[xoggoth]

Boring but stop neglecting accounts and start keeping proper records, even if it's only simple spreadsheets. An accountant can only do as good a job as the information provided.

[LondonManc]

To be honest, you'll clear your debts quicker if you can get another year of contracting under your belt. Go really tight on costs and just accept that this is the year that you put things right. Good luck - addictions are horrible, whatever they are and gambling is one that garners little sympathy from people.

[ladymuck]

... and you have a breakdown there and then in front of a third party debt collector.

Worse still, you end up on that godawful debt collection "reality TV" show.

I'm annoyed on your behalf that your accountant seems to have a head in the sand attitude. They are probably right, it will all work itself out. However, what (I am assuming) you want right now is a bit of hand holding and guidance and being told the details so you have a clear idea what's going on.

You have a few things undecided at the moment. You may/may not get that permie job. You need to consider what you will do if the contract ends and doesn't turn into a perm role. Will you stay in contracting, or find another perm job?

Assuming you want to quit contacting and get a bit of stability job wise to help your recovery (makes perfect sense to me, contracting itself is a bit of a gamble), I agree with the above suggestion of winding up your company and just using an umbrella. Not as tax efficient but all your liabilities will be known and you can plan how to deal with them. If you end up with a big bill owning to HMRC, do get in touch with them sooner than later to work out a repayment plan. It's far, far better than the alternative.

If you decide you want stay in contracting, then I would recommend you consider changing accountants. Give yours another chance to help you, that's what you're paying them for, but if you think they're not delivering there's a huge sticky with discussion about good accountants you can refer to. Lots of people bang on a bout FreeAgent; remember, it's just a tool and while some people think it's the second coming, others (like myself) are happy enough with what they've got (I use Sage Instant Accounts). There's no right or wrong answer, it's simply personal preference.


Good luck! And well done for your 8+ months sober.

[LondonManc]

Whatever bills you get from HMRC that you cannot currently meet (as in when you wind up your company), talk to them. Explain your situation, including the gambling addiction, and let them know that you're keen to get on to a repayment plan to put things right. They'll be far more sympathetic than if you shy away, they send someone round and you have a breakdown there and then in front of a third party debt collector.

[Contreras]

I hope to become a perm employee in the next couple of weeks, so i don't think it will be beneficial to change accountant.

Are there certain questions i should ask to my accountant? I am planning to have a sit down some point this month.

In that case speak to your accountant about winding up the company now. Cite not knowing your liabilities as one reason for wanting to wind up. Ask what they need from you.

If you still need a vehicle for contracting in the short term then consider going umbrella.

[northernladuk]

FA is Freeagent.com. Many accountants now offer it as part of their package. It's only a tool and works with good advice but at least you can see your finances. If you are going permie then it's too late for that really.

It's tempting to get in to your situation on here but I guessing it's very complicated and will need all factors considering when giving advice, particularly if you have thrown permie land in to the mix and talking about DLs etc. I don't it's gonna help you us stabbing at guesses but confidence isn't high in your accountant. Not too sure what to suggest.except talk it through with the account, be very clear what your situation is and get it in writing. You can get a second opinion and also cover yourself.if you get poor advice.

[liy316]

Simple solution - either change your accountant pronto, or at least ask your current one to provide a little more guidance than they seem to be currently.

I hope to become a perm employee in the next couple of weeks, so i don't think it will be beneficial to change accountant.

Are there certain questions i should ask to my accountant? I am planning to have a sit down some point this month.

Thanks for your input

[liy316]

I guess he's not a Free agent accountant? The FA portal will help a lot with understanding your own situation and with some tax planning from your accountant you'll have everything you need. Mine also reviews the portal and my situation every quarter to correct an errors or checks it's working OK for me.

TBH though the answer you want for your situation because you are in a mess and also have no war chest is 'the absolute minimum to live'

FA portal - Where can i find this? - A little new to the site. Happy to do this.
I think i have reached a point where i should be even in terms of "director loans". But i'm not certain. My accountant is part of a mid-sized firm. He is very knowledgeable, perhaps i'm too small fry for him to worry about?

I don't know how hard it will be for me to leave him, and have someone else take over.

I'm hoping my employment situation will change and i will be offered a permanent position at my current firm.

It will help simplify things at least.

Yes, i'm pretty much trying to only withdraw when i run out of cash in my current account. It's been a long 24 months!

Gambling addiction => Very insidious!

[northernladuk]

I guess he's not a Free agent accountant? The FA portal will help a lot with understanding your own situation and with some tax planning from your accountant you'll have everything you need. Mine also reviews the portal and my situation every quarter to correct an errors or checks it's working OK for me.

TBH though the answer you want for your situation because you are in a mess and also have no war chest is 'the absolute minimum to live'