For many contractors, self-employment means doing everything themselves, as this gives them control over every single aspect of the business. However, just because you became a contractor to be your own boss doesn’t mean you have to spend time and effort on managing your accounts.
Engaging the services of an accountant when self-employed can be beneficial for your business, as taxes and laws in the UK are complex, change frequently and get updated often. Keeping on top of it all is a challenge when you’re already busy building your business, so hiring an accountant to handle all admin for you is usually the right move.
In this article, we’re highlighting the reasons why you should get an accountant and how your business can reap the benefits.
Stay Compliant
One of the key benefits of having an accountant is that you will always be compliant with the latest legislation. This is because accountants are experts who stay on top of not only news but also government changes and tax law updates. Considering there is so much for you to keep track of, like VAT, corporation tax and income tax, it’s easy to make mistakes or to file a late return.
Your accountant will be aware of all important deadlines, not to mention all the specific documents you need to submit, and will ensure that you have the correct information on them too.
Free Up Your Time
Because accountancy is a complex matter, it’s also time-consuming, especially when you’re running your day-to-day operations at the same time. You must also have an in-depth knowledge of accounting and laws – and keep up with reforms – to ensure you’re compliant, which can take up a lot of your valuable time.
In fact, we’d go so far as to say that accounting can feel like a full-time job in itself, especially if you’re not a numbers person to begin with. Contractor accountants, such as the Gorilla Accounting experts, can guide you in everything tax-related and also take care of all financial admin for you.
One of the main benefits of enlisting an expert to manage your tax allowances and returns is that you’ll have more time to focus on your company.
Get Trustworthy Advice
Setting up a business is a dream for many people and, with it, comes a whole new world of taxes and admin to keep in mind. Getting good tax advice is always important, but it’s especially critical for start-ups who are still building the foundations of their business.
If you hire an accountant, you don’t have to worry about keeping up with your accounts or being afraid to make mistakes. A qualified, expert accountant can provide you with all the information you need to know, from which expenses to claim to any tax allowances you’re entitled to.
Boost Your Tax Efficiency
Another benefit of hiring an accountant is that they can help you to maximise the tax-efficiency of your business. Contractor accountants have a lot of knowledge when it comes to managing your accounts, and they’re capable of analysing your small business expenses and incomings and advise you on how to boost your profits.
Because your accountant will be aware of all your business’ financial details, they’ll more easily be able to find something you missed. All in all, when you hire an accountant, you get a partner who can advise on the most tax-efficient way to pay yourself, help advise on the share structure of your business and help with advising on the relevant expense that you may be eligible to claim, which are tax deductible in most cases. All of this information will help you to make better business decisions as well.
An accountant will also help you to save money in the long run because they ensure you submit all documents correctly and on time, eliminating late fees and penalties.
Communicate with HMRC
Dealing with HMRC can be another time-consuming, stressful task, but your accountant will be able to help. HMRC can contact you to request more information on a return you filed or with a query relating to your tax code, for instance. This can be especially frustrating if there is a mistake on a return or if there’s some data missing and HMRC is looking into it.
As expert accountants, we’ll handle these enquiries and, of course, make sure that all information is correct from the get-go.
Help with IR35
IR35, or intermediaries’ legislation, has been a headache for many contractors ever since its implementation back in 2000. The private sector rules will be introduced in 2021, as they’ve been postponed due to the coronavirus pandemic. Once the new tax year comes around, however, businesses need to be ready.
If your contracts are within IR35, you have to pay the correct amount of income tax and National Insurance contributions. If this is not correctly calculated and filed with HMRC, you risk having to pay an exorbitant amount in back taxes later on, like BBC presenters David Eaves, Tim Wilcox and Joanna Gosling, who ended up having to pay a total of £920,000 in unpaid taxes.
Making sure that you’re compliant is, therefore, critical, and it’s something that an accountant can help you with. In fact, we offer comprehensive IR35 reviews that will put your mind at ease and will happily work with you if you’re caught within IR35.
Know all Key Dates
As a contractor, you have many annual tax deadlines to remember and this can become overwhelming when you already have so much information to keep track of in your business. Again, this is where an accountant comes in to help – we can help you avoid fines and penalties by making sure you’re submitting all your paperwork on time.
For example, we’ll stay on top of deadlines like:
- First payment on account – Occurs by 31 January and refers to the amount of income tax and National Insurance contributions you have to pay.
- Issue P60s – You have until 31 May to issue your staff with their annual P60s.
- Filing P11Ds – If applicable, you have until 6 July to submit these forms to HMRC and to your employees.
Industry-Specific Advice Tailored to Your Business
Contractor accountants also have specialist knowledge in many different industries. From IT, social media influencing and locum medicine to property investment and art, Gorilla Accounting can help. We’re always up to date with the latest information, be it on Section 24 or tax relief for electric vehicles.
You may even miss out on something like capital gains tax you have to pay when disposing of a property. So, an accountant who doesn’t understand your market may not know of a specific legislation that can reduce the amount of tax you pay or important deadlines that you must comply with.
Grow Your Company
Another reason to hire an accountant is that they help you to grow your business. Minimising tax liabilities is an important benefit of an accountant, but they can also set up your company for future growth. This includes helping you expand your team and take on staff, as well as advise on the tax treatment of loans and overdrafts. Saving is a key element to business growth as well, and accountants will help you find all the little ways in which you can save money on your company and improve your cash flow.
In short, by hiring an accountant, you can ‘see the forest for the trees’ a lot more, which will improve your strategic decision-making as well.
Make Use of a Range of Services
Gorilla Accounting provides you with more than just bookkeeping services. We’re a one-stop-shop for contractors looking to:
- Incorporate their business
- Get their self-assessment submitted
- Have their payroll prepared and submitted
- Ensure their Companies House Confirmation Statements are prepared correctly
- Get dividend and board minute documentation
- Receive assistance with HMRC records checks
- Get standard employment status references
- And more
We’re also sole trader accountants and partners with the best insurance and mortgage providers. We can offer business banking too, something that is essential for all contractors operating through a limited company. We even provide clients with a virtual assistant through our trusted partners.
Access to Accounting Software
This perk shouldn’t be underestimated. Gone are the days when business owners did everything by hand or made use of Excel spreadsheets. Today, and especially with the advent of Making Tax Digital (MTD), companies need to make and record all transactions digitally through specialised software.
When you hire a contractor, you often benefit from an MTD-compliant tool. For example, at Gorilla Accounting, we offer FreeAgent accounting software to our clients, which is used by over 100,000 small businesses.
This software can be access 24/7 from anywhere and any device, allowing you a real-time feed of your accounts. You can also upload receipts, manage expenses on the go, create personalised invoices, upload your transactions, and so much more.
Your accountant will also have access to all of this information and use it to help you grow your company.
So, What to Look for in an Accountant?
There are many things to consider before hiring an accountant, as we’ve seen. You’ll want to check a few of them out before making that all-important decision, as you’re essentially searching for a business partner to help your company thrive:
Qualifications and Experience
Your accountancy firm should be competent and with a good reputation, and its accountants should have all the necessary qualifications, such as the AAT or ACCA certification.
Costs and Fees
At Gorilla Accounting, we believe in offering our clients high-quality services at competitive prices. For example, our all-inclusive limited company package is only £110 + VAT per month. It’s also crucial that you choose an accountant that won’t charge you unexpected fees – at Gorilla, we’re transparent and have no hidden fees, so what you see is what you get.
Services Provided
Depending on why you need an accountant, you should also consider the services a company offers before deciding. After all, your dedicated accountant should be able to answer all of your questions, whether they’re on self-assessment or corporation tax.
How Can Gorilla Accounting Help?
As limited company accountants, we can help you with many different things, including setting up and running payroll, setting up a limited company, registering your business for VAT, submit returns, offer tax-planning advice, and so much more.
Finding the right accountant is crucial, so make sure to hire a firm that understands the self-employment market and your specific industry in particular. As our client, you also get same-day replies if you contact us before 3pm, as we understand you’re busy and need a quick answer to your urgent queries.
For more information about our services, please don’t hesitate to get in touch with us today on 0330 024 0406.
