Reply to: Doing my own accounts

[ladymuck]

It's the most mind numbing task imaginable

I actually quite like it

[oilboil]

I don't think anyone is saying it's difficult.

The biggest issue is not knowing what you don't know. How many tales of woe do we hear with basic mistakes made due to not knowing the basics?
And as other have said, make money doing what you do, and pay a professional to do what they do. It's the way of the world.
It's why I buy my beer rather than brew it myself. Yes it costs more, but it's ready when I want it and tastes like it's been made by a professional.
And it's also probably boring.

It's the most mind numbing task imaginable

[Lance]

Maybe best to use an accountant for a year while setting up your own system, then see how close you were.

Really, I'm a bit surprised that some on here think accounts are difficult when they are doing much more complex stuff for their clients everyday. Biggest problem I suppose, it's boring!

I don't think anyone is saying it's difficult.

The biggest issue is not knowing what you don't know. How many tales of woe do we hear with basic mistakes made due to not knowing the basics?
And as other have said, make money doing what you do, and pay a professional to do what they do. It's the way of the world.
It's why I buy my beer rather than brew it myself. Yes it costs more, but it's ready when I want it and tastes like it's been made by a professional.
And it's also probably boring.

[ladymuck]

The furlough scheme can be administered by anyone. There's nothing to transfer really.

Any new accountant would ask you to authorise a form that basically tells HMRC that they are acting as agents on your company's behalf. That's a normal part of any handover.

As has been mentioned on here before, many times, the bulk of an accountant's activities are still the same regardless of whether you're earning or not - they may not be doing VAT but they're still administering the PAYE. The new furlough scheme does require a bit of effort to make sure the claim value is correct but I suspect that's easier now we're a few months in - not quite sure how that will affect the P32 and PAYE year end, it may result in more admin work to be done. Year end accounts still need to be done in full - you don't get CoHo and HMRC letting you off doing full accounts if you've not worked a few months. Monthly payments are simply the full year's charge for all the services done / expected to be done but spread out for convenience.

I pay my accountant once a year, on completion of my year end accounts. I personally prefer it that way because I'm paying for a professional service, not a utility bill.

[CountryGirl]

Hi Guys,
Thanks a lot for your input.
As things stand at the moment, I am pretty determined to leave my accountant in any case.
This is mainly for 2 reasons:
A. When I asked him for a reduced fee for this period when I'm out of contract, he decided
to charge me (retroactively) for submitting my furlough requests, even though those were made at a time when I fully paid him!
B. He DD'ed this from my Ltd. company account despite my objection.

I guess I will look for a new accountant, so any recommendations are welcome.
Also wanted to know whether I can transfer the furlough scheme to the new accountant.
Thanks again.

[Chart Accountancy]

The risk would be that you might overpay (or underpay) tax if you don't use an accountant. For example, if you don't run a payroll or declare a salary at the LEL NIC level when a payroll scheme has not been registered with HMRC, this will be an immediate corporation tax overpayment of over £1K. If you have not registered for VAT because you wanted to keep things simple to allow you to make your own submissions, you would have missed to earn an additional £14 for every £1,000 invoiced in your first year of registration under the Flat Rate Scheme (if a limited cost trader). Or if you have registered under the Flat Rate Scheme, you might have missed to claim VAT on pre-registration expenses, which is something that I have seen even some accountants missing to claim ( I have disappointingly noticed this on a few occasions from handover clients from some of the large non-qualified accountants firms). Tax is complex and a qualified accountant is likely to have the understanding and the ability to help you not only calculate the correct tax due and make the necessary submissions but also ensure you are not missing out on saving tax or earning some money back in your business where possible.

I am not even mentioning things that can go wrong. We manage the accounts for a few qualified accountants who are not practising in preparation of statutory accounts so this confirms the comments above that it is not sufficient to be an accountant but also working in Practice to ensure you stay on top of all changes in the legislation. I would say that preparing your own accounts is of course possible but can impose a few challenges in the long term. I would certainly not recommend to DIY statutory accounts and corporation tax returns to anyone who is not a qualified accountant with a practising certificate.

[xoggoth]

Maybe best to use an accountant for a year while setting up your own system, then see how close you were.

Really, I'm a bit surprised that some on here think accounts are difficult when they are doing much more complex stuff for their clients everyday. Biggest problem I suppose, it's boring!

[xoggoth]

Having retired quite a few years ago, I don't have recent experience in contractor accounts, but a contractor's accounts aren't that hard, usually one invoice a month. My little business accounts are way harder, although the income is tiny. Lots of small purchases, bank, Amazon, Google, Worldpay and Paypal accounts, wholesalers who don't pay in line with invoices, stock, and an idiot sister who can't get anything right, sales dated in the far future and from William the Conquerer's time.

You need to keep spreadsheets or other records of all your business and personal expenses, receipts, bank transactions and payments to yourself anyway to give your accountant. Not so hard to create linked sheets for VAT, PAYE, company accounts and Corporation tax. VAT is quite simple, annual accounts and CT are both much simpler than they used to be, you can do both in one submission.

I wouldn't assume professional accountants get it right, I had one that made some massive cockups. Even if you do use them, it helps to have your own checks.

PS HMRC have online calculators for PAYE.

[ResistanceFighter]

Hi Guys,
Under the current circumstances, and being currently out of contract, I'm starting to consider the above mentioned option.
Will be glad to have your thoughts on that, especially from the ones who have already tried it.
Thanks in advance.

For me I’d rather do a few days work, doing what I’m good at, to then pay someone else to do something they are good at that to me is rather important to get right


Sent from my iPhone using Contractor UK Forum

[ladymuck]

I'm doing my first year going it alone after about 8 years contracting in UK and 4 in Ireland, and it's a much simpler business in Ireland. And I'm not fully going it alone as an accountant will do my end of year accounts (and hopefully catch any mess I've made).

That's what I do. All my own PAYE and VAT, bank reconcilations, invoicing, depreciation, accruals and essentially produce accounts to the Trial Balance stage. Then I chuck it over the fence to my accountant who does the year end submissions to CoHo and HMRC, and CT calculation. They literally only receive my trial balance and closing bank statements. They'll then just confirm what I've put in some accounts to make sure I'm coding correctly or if there is a notable year on year change in the balance of an account. I then get sent a year end journal to input with the CT value and any adjustments they recommend and that's it. The turn around is quite quick, maybe because I'm one of their faster payers

[Old Greg]

I think I'm about to make the leap but I think you need a good 3 years of 'having an accountant' first to get used to it

I'm doing my first year going it alone after about 8 years contracting in UK and 4 in Ireland, and it's a much simpler business in Ireland. And I'm not fully going it alone as an accountant will do my end of year accounts (and hopefully catch any mess I've made).

[EdWall]

I have never used an accountant.
I have done my own accounts for 10 years. No regrets.
Year 1 required a bit of concentration. Once you've done it once, it gets easier.

[PerfectStorm]

I think I'm about to make the leap but I think you need a good 3 years of 'having an accountant' first to get used to it

[Lance]

The fact you ask suggests you don’t know enough to do it.

If I was contemplating DIY I’d first investigate what was involved. Then I’d decide if I thought I was capable. At no point do I think I’d ask strangers who don’t know me if I’m capable.

[Scruff]

I'm an accountant by training, and have done my own accounts in the past...

I ( happily) pay my accountant now, to do them for me, since I can't be arsed.

Shop around and I'm sure that for £60+VAT you'll find someone adequate? There are loads of small accountants who are desperate to get new clients onboard. Our typical IT Contractor accounts are a piece of cake, tbh.