Reply to: Doing your own payroll etc instead of an accountant.

[Ignis Fatuus]

You don't have to know these things, you ask them on the professional forums and NLUK comes along and tells you that you're not cut out to be a contractor.

FTFY

[philip@wellwoodhoyle]

The issue with this is that Freeagent allows a dividend to be declared, irrespective of whether the company can afford one. This can mean it is entirely possible that an illegal dividend is declared and you end up with an overdrawn directors loan account - all sorts of issues for HMRC to pick up on.

The FAC dashboard gives you a real time figure of the amount you can pay as a dividend. Of course, it doesn't "stop" you from paying too much - how could it? - It doesn't control your bank account. Surely it's not unrealistic to expect the user to look at the figure on FAC and then make his own decision about what to pay.

If you do pay too much dividend, then the system will show negative dividend availability until more profits are earned and then the rolling, live, available dividend figure reflects the excessive dividend paid earlier, so again, if the user checks the figure, they can correct any earlier over-draw.

I don't know of any other software that comes even close to this kind of live reporting which really does help the business owner stay on top of the company finances.

BUT, it's always going to be down to the business owner to look at the figures on the screen and make their own decisions. You can only lead a horse to water, you can't make it drink!

[Waldorf]

Freeagent is the closest you'll get to a full package.

It will provide you with live updated forecasts of amount available for dividends and accruing tax liabilities etc.

The issue with this is that Freeagent allows a dividend to be declared, irrespective of whether the company can afford one. This can mean it is entirely possible that an illegal dividend is declared and you end up with an overdrawn directors loan account - all sorts of issues for HMRC to pick up on.

I use an accountant, I earn enough, so why bother trying to get my head around tax issues. overdrawn directors accounts, VAT, PAYE, it just isn't worth my time.

[ratewhore]

Hi,

Just a consideration of mine.
I'd like to hear from contractors who do there own books,payroll, vat returns etc.

How hard is it ? & where can I learn how to do it myself.

I use HMRC Basic Tool for PAYE, very straightforward and also year end forms taken care of within the tool.

I do my quarterly VAT myself manually and it takes less than 5 minutes to work out the figures and file the online VAT return.

I have a spreadsheet for my income v expenditure. A bit like SJD's but simpler. I then send the spreadsheet, bank statements and invoices to my local accountant who does my year end and files the forms.

Job done, not time consuming, easy peasy...

[BolshieBastard]

Hi,

Just a consideration of mine.
I'd like to hear from contractors who do there own books,payroll, vat returns etc.

How hard is it ? & where can I learn how to do it myself.

I prefer to use my free time for just that, free time and not having to think \ worry about this type of stuff. My accountant does it (although I used to do the VAT returns).

[simondolan]

Goddamit

Shouldn't you be putting some test laps in or something.....

Not yet - still here......

[northernladuk]

You don't have to know these things, you ask them on the professional forums and NLUK comes along and researches it all for you.

Not quite correct. I point links and previous posts for the OP to do it himself. The quality and accuracy of information in those links is his problem

[psychocandy]

Not for me. Don't mind paying accountant as long as they're good (NW are).

Would rather pay someone to do it properly rather than me take twice as long to do it and then still not be sure if its right.

My wife runs business as sole trader. We used to run as partnership and pay accountant to do returns but this year, business has been slow and I didn;t want to shell out £300-£400 when the business only made about £2K profit so decided I;d do it. (and sole trader return is much simpler than partnership return).

Not as easy as I'd hoped and I've spent more time than I'd have liked reading HMRC docs and trying to work it all out. Luckily, got extension till march or I'd be buggered if it had to be in by today!!!!

[moggy]

Specious arguement. They are responsible for their finances, not Darren. And that includes ensuring payments are made.


Agreed totaly, but I prefer having expert support, especially in a world that keeps changing. And even simple things have gotchas - what, for example, is the VAT treatment of buying lunch for the client's team?

You don't have to know these things, you ask them on the professional forums and NLUK comes along and researches it all for you.

[malvolio]

Tell that to the people who went with Darren Upton!

Specious arguement. They are responsible for their finances, not Darren. And that includes ensuring payments are made.

My view is that ultimately I am responsible for the accounts, even if I pay an accountant, it is just for advice not assurance, so it is in my best interested to know as much about them as I can, I know for the first year I made some mistakes, but on the whole we do not have very complicated accounts, so time spent learning about your business is time never wasted.

Agreed totaly, but I prefer having expert support, especially in a world that keeps changing. And even simple things have gotchas - what, for example, is the VAT treatment of buying lunch for the client's team?

[SimonMac]

For the sake of circa £100 accountant's fee saving it is not really worth it imho, unless you are comfortable with both the basics and nuances of accounting practices.

Going with an accountant = 1 less (major if all goes wrong) life stress.

Tell that to the people who went with Darren Upton!

My view is that ultimately I am responsible for the accounts, even if I pay an accountant, it is just for advice not assurance, so it is in my best interested to know as much about them as I can, I know for the first year I made some mistakes, but on the whole we do not have very complicated accounts, so time spent learning about your business is time never wasted.

[LisaContractorUmbrella]

This would be a bit like thinking that plumbing is easy and having a bash - you may end up with a perfectly functioning system of waste and water pipes but you may also end up with a flooded kitchen. In this case though you may end up with a perfect set of accounts or you may end up having a long and difficult exchange with our friends at HMR&C (although I am not sure the analogy works as that would be far worse than a flooded kitchen)

[northernladuk]

I heard that..... .

Goddamit

Shouldn't you be putting some test laps in or something.....

[kaiser78]

For the sake of circa £100 accountant's fee saving it is not really worth it imho, unless you are comfortable with both the basics and nuances of accounting practices.

Going with an accountant = 1 less (major if all goes wrong) life stress.

[simondolan]

I would be interested to know what the OP's motivation for this is?

Is it cost? You want to save the company £1200 or so a year or your pocket around £960? Take the cost of freeagent off this as well.

Is it to be more in control of the companies finances... which you should be anyway as you sign for it at the end of the day so you are already legally responsible for it so should be checking everything the the accountant does and directing him as you see fit. He is after all only providing a service...

Or is it because you want greater visibility of every transaction, expense item so you can account for every penny at any point in the year and report on it because your accountant doesn't provide decent tools to do this?

I have been tempted by freeagent from other posters comments but at the moment I find SJD's spreadsheet a godsend and am more than happy with it at the moment. The previous accountant I had didn't give me a single thing, just asked me a load of questions at key points of the year so had to put a lot of effort in to tracking everything with no help. SJD and other accountants also work with freeagent so even if I did use it I probably wouldn't get rid of my accountant anyway.

I can't see any argument why I should stop paying a grand to get it right personally. Spending time on here reading daily posts about chumps trying to do it themselves and don't even know how to put expenses on a P11D or when and how to fill in dividend vouchers against payments so have to ask a bunch of strangers on an internet forum has convinced me of that.

<makes sure Simon D isn't around> although saying all that I do feel put out from time to time when I pay top dollar for accounants that then just ask me to send my spreadsheet in and take the calcs of that... but it works very well and has done for 4 years so am happy to stick with it. I do have an accountant on call whenever I need him and they always answer within a working day so can't complain really.

I heard that.....

Thing is, no matter what you do, you really can't get away from having to do the bookkeeping. Loads of products out there - many free, and many of them good, some of them expensive.We use the spreadsheet because it is so transparent and so simple. Whatever method though, its just a way of getting the figures from client to accountant. The real value in an accountant lies in making sure the client is doing everything correctly, making sure they are running as tax efficiently as possible, being there for when you have a query or simply want to bounce an idea off and keeping up with the legislative changes (of which there are many!)

It is of course possible to do it all yourself, same as you could rewire your house, change an engine and possibly brain surgery. Whether that's a good idea or not just comes down to your perception of the value of your time and the strength of your abilities.