If you’ve spent any time at all on this site, you’ll know we’re big on tools that make bookkeeping much simpler, faster and more accurate. But if that’s true, what do you need an accountant for?
I get asked this a lot. And after I’ve finished crying, I point out that there are lots of things we can all do to some extent but need an expert to do properly. I can change the tyre on my car and fill up the wiper fluid, but I’ll still ask my local garage to do a service on my car each year.
It's much the same with accountancy. The bookkeeping tools available are brilliant, but you need an accountant to provide the context, to check you’re using the tools correctly, to ensure you’re claiming everything you should, and not claiming anything that might get you into hot water.
The specific reasons may be different for every person, but every businessperson needs an accountant:
When you launch your own business there are, roughly, 3,001 things to do, so DIY accountancy isn’t likely to feature very highly. Yet, valuable though it is, the time saving ability to hand your books to an accountant and say “over to you” isn’t the only reason to do it.
When you’re starting a business for the first time, everything is new. You’ll need to decide whether to set up as a sole trader or limited company. You may need to be VAT registered. You’ll want an accounting setup that’s quick and easy from the outset, and all of that only happens when you choose the right accountant from the outset too.
Switching accountants is easy (it’s about as simple as switching your home insurance policy and you probably do that every year). But setting out on the right path with the right accountant first time is even easier.
Suppose you didn’t launch your business with an accountant as part of the team. Suppose you decided to do your returns yourself and things have got away from you – perhaps because you’ve missed a deadline, made an error in your submission or missed some new piece of legislation that means you should have done something you haven’t.
“Help!” is often one of the first words we hear when we speak to new clients. If you’re feeling a rising sense of panic because HMRC is sending you scary letters and you don’t know what to do next, talk to us.
It would be wrong of us to say that it’s impossible to do a DIY VAT return. Lots of businesses do (especially ones with a simple business setup), and lots of them do it successfully BUT VAT can be scarily complex. Depending on your business, you may need to process VAT at different rates (it’s usually 20%, but many goods and services are vat exempt or zero rated and some are even charged at just 5%). You can’t always claim VAT back and if you get your VAT wrong the penalties can be hefty. Which is why most VAT registered businesses don’t risk it and ask their accountant to sort it instead.
If you have a subscription to a monthly trade journal, can you claim it as a taxable expense? How about a regular osteopath appointment if your work leaves you with back pain? What about buying Christmas gifts for your staff?
You can’t guess this stuff. Wrongly assume you can’t claim and you could be paying too much tax. Wrongly assume you can and you’ll be penalised for it.
So for a simple yes or no on what you can claim and what you can’t, ask an accountant.
Whether you’re a sole trader, a limited company and/or VAT registered, you’ll have clear deadlines by which your return needs completing and tax needs paying. With a million competing priorities, it’s all too easy for those deadlines to slip by when you’re handling your accounts yourself, and that can mean big financial penalties. With an accountant, you’ll never miss a deadline again.
There are opportunities hidden in your financial data. You figures could hold the secret to whether you’re undercharging, whether areas of your business are underdeveloped or underexploited or whether you could lower your tax bill. With a good accountant, you’re much more likely to see those opportunities.
Join The Tax Farm
Lennon needed McCartney. Fish needs chips. Your business needs an accountant. The right accountant is more than a number cruncher and tax return filer. They’re your business guardian, helping you make better business decisions. We’d love to help you.
Talk to The Tax Farm accountants now.