The idea of taking care of your own finances can be quite daunting, so having the support of an accountant can ensure this part of your business is being taken care of properly.
There are many myths surrounding contractor accountants, some people think that it is a luxury they can’t afford or that they are just there to fill out forms and keep the taxman happy. However, an accountant can do so much more than this, even saving you money with their in-depth knowledge and advice.
Why have a contractor accountant?
There are many different reasons why you may benefit from having a contractor accountant:
• To ensure sure your finances are correct. You need to make sure that your finances are dealt with properly; otherwise you can get into trouble with HM Revenue and Customs. By having an accountant you can be confident knowing that your tax return and any other documents will not only be filled out correctly, but will also be done in time.
• Save you time. If you don’t really know what you’re doing when filling out the various necessary forms, then it could potentially take up a lot of your time. A contractor accountant will be able to do this more efficiently, saving you the time to work on your business and earn money.
• Tax planning. A good accountant will be able to legally minimise your tax bill, saving you money, which will essentially mean that the service will more than likely ‘pay for itself’. You will be able to take advantage of the ever-changing tax laws, which will mean that you will pay as little tax as possible.
How to Choose a Contractor Accountant
It’s best to take on an accountant that specialises in working with contractors, so that they will be able to offer you the best possible advice that will suit you and your working practices. It is very important that your accountant understands how contractor tax works and knows how to advise you properly.
Other hints and tips for choosing a contractor accountant include:
• Do you get your own dedicated accountant and can you meet with them? Tax can be extremely complicated for the average person, therefore you want to know that you’ll have someone who you can speak to, email, meet and who has the time to learn all you and your business.
• How much do they charge? Most accountants charge fixed rate fees but it is worth checking that their fees are not linked to how much you earn and that there are no entry or exit costs.
It’s also a good idea to find out if there are any additional costs, such as being charged every time you call or email your accountant. You should also make sure that that they’ll cover your personal taxation, and if not find out how much they charge extra for this.
• What credentials do they have? Often companies can provide an array of meaningless awards and accreditations, so it’s worth doing your research into their claims.
Find out who has supplied the award; it should be a professional body or highly regarded third party. If not, make sure that it’s not just another website looking to sell awards to the highest bidder.
• Are they IR35 experts? With IR35 being a legislation that often confuses contractors, it makes sense to have an IR35 accountant who has a long history of experience with the legislation.