In the UK, self-employment is becoming an increasingly popular option due to numerous personal, financial and economic changes.
Occasionally, self-employed individuals operate as a registered limited company. A significant potential incentive for self-employment is the increased flexibility to the working schedule it can offer and the ability for individuals to manage their own career development. However, self-employment is not without its distinct difficulties. A major consideration, which can often be overlooked, is the effective management of business accounts and taxation.
Due to the complexity of managing accounts and tax returns, it is generally recommended that self-employed individuals engage with a professional accountant, especially during the preliminary stages of establishing the business. The decision to utilise a specialist accountant depends on personal preference and may also be influenced by the developmental stage and type of business. In addition, the income of the business may also affect this choice, although even smaller earnings may be maximised by consulting with a knowledgeable professional.
During the early beginnings of a limited company or when seeking self-employment, it is highly recommended to consult with an accountant service to establish an effective bookkeeping strategy which can be implemented throughout the life cycle of the company. Developing this system early will pay dividends during later stages of the company and ensure that accurate records are maintained from the start. Furthermore, it is an effective use of time to hire a professional to create an accountancy system, allowing you more time to focus on running the business with the assurance that the financial aspects are being expertly guarded.
As an overview, here are just some of the roles a professional accountant service may provide:
- Ensure accurate bookkeeping of the company accounts, meaning that all financial records are updated on a regular basis by effectively using online platforms. The nature of the accountancy system used will of course vary depending on the status of the business. A professional accountant can, of course, assess which system will be most beneficial and tailor this to your individual needs.
- Guarantee that all expenses are claimed accurately and efficiently, with the supporting documentation needed to support any claims.
- Using historical knowledge gathered from time spent in the sector, a professional accountant service can help to plan and forecast finances. This is particularly useful for smaller, start-up businesses who may encounter financial pressures and may need to manage finances effectively to still ensure profits are obtained.
- Assist with the completion of your end of year tax return and supply the necessary supporting documentation. They can certify that the correct information has been provided which ultimately gives you peace of mind to focus on other matters pertaining to running the business.
- Provide coherent advice on the latest updates to compliance and regulations to ensure that you make empowered decisions regarding strategies to improve business management, such as the best software or recording strategy to adopt. Likewise, they can assist in helping you recognise the best business structure to suit your individual company and how to change this as the company develops.
- Handle issues related to the HMRC and other government departments such as Companies House.
- Maximise profits and potentially help to save money by amending the business structure to maximise savings (such as through managing tax savings).
- Provide flexibility in services so that you can consult with them on a basis that is tailored to the demands of the business. For instance, annually for tax returns or more regularly to maintain accurate business accounts and invoices.
In general, the roles provided by a professional accountant are numerous but can be tailored depending on the unique requirements of each self-employed worker or limited company.
Importantly, the requirement for accountant services may largely be dictated by the knowledge and confidence the individual has in managing finances (and potentially large sums of money). This is of particular importance if you need to pay others for their services, or increasingly discover that you have difficulty tracking invoices. Furthermore, filling in your tax return can be a very daunting task, with the need for accuracy and provision of relevant supporting materials. It is recommended that if you have any doubts in your abilities or find you are spending a substantial amount of time dedicated to attempting to manage the business accounts, then seeking a professionally qualified accountant will be remarkably beneficial.
