For those who are contractors small-scale business or freelancer knowing the aspects of the tax issues for your company is likely not the first thing you’re thinking of. The following article will explain why the appointment of an accountant is a good business sense.
If you are establishing yourself for the first time as a freelancer or even a small-scale company one of the primary obligations you must face up to is tax issues. Alongside a dependable insurance policy for freelancers You may discover that accountants play significant responsibilities in assisting your company.
When you’re working for yourself, each penny is worth it, from the money entering the bank, to money that goes out. Monitoring the entire process is an obligation that isn’t a whole lot, but it’s easy for people to view accountants as just another expense. However, there are many reasons to spend that more to have a cheap accountant who is competent can increase the success of your company. Here five of the benefits that an accountant can provide to your company.
1. It will save you time.
If you decide to work as a self-employed individual, whether as a contractor, limited business owner, a consultant or freelancer Your goal is to create profits and complete the tasks you’ve been awarded.
Doing the paperwork, and keeping track of your expenditure and the new information that is arriving can take a lot of time and even take time away from the job at the present.
A professional accountant who is up to date with the most recent tax laws, regulations, deadlines, and one who fully comprehends the formats HM Revenue and Customs requires to receive all information, will help you save hours and hours of time spent scouring the website of HMRC, allowing you free to utilize your time more effectively.
2. Reduce your tax obligation
A competent accountant will know the best ways to save you money as well as provide you with sound advice regarding the most tax efficient method of managing your company.
Understanding the most efficient method of operating regardless of whether you are self-employed or as an LLC (external link) and the most tax-efficient method to withdraw money of your business is something they can guide you according to your specific circumstances and needs.
They will also go through the process of paying dividends and understanding the limitations on what you are able to and cannot claim as company expenses, and the advantages of the VAT scheme with a flat rate.
Flat rate VAT (FRS) is an incentive offered by the government which permits companies to invoice VAT at the normal rate (20 percent in 2014) however pay HMRC back with lower percentage. For instance, if you’re an IT consultant with low VAT-related expenses, you will only have to pay 14.5 percent to HMRC using an annual basis under the VAT flat rate scheme and save the remainder as profit.
An experienced accountant can provide you with the most accurate advice about whether the FRS is suitable and will financially help your company financially.
3. Avoid paying penalty and tax fines
One of the main aspects of managing your finances and working from home is staying on top of paperwork and staying clear of any penalties due to late payment. For some , this is a part of their job they’re content to stay current with. For those who don’t, an accountant is logical so that they don’t have to worry about the looming deadlines, stay aware of the most recent legislation , and also ensure that they won’t be late on an important tax deadline.
Staying on top of tax filings, regardless of whether you have the assistance of the accountant you use or not can aid in keeping your cash balance healthy by avoiding penalties that could vary from PS150 for one day of late filing annual accounts up to a staggering PS1,500 fine for a delay of six months.
These are only the penalties that you incur if you’re late in with your annual accounting This doesn’t count the penalties if you’re lateor have submitted your forms in error to submit your self-assessment tax return as well as VAT return and corporate tax. Your accountant will be on top of deadlines, so that you don’t have to.
If you are currently a contractor, plan on the possibility of becoming a contractor or own company that hires contractors, then there’s numerous tax implications that you need to be familiar with. Self-employed contractors who work through a limited company may gain tax advantages however you must comply with the rules of IR35 to be able to claim the benefits legally.
4. Help you grow your company
An accountant who is knowledgeable will provide you with knowledge and guidance to help you increase and expand your company.
Most clients have their own accountant therefore, from the beginning you’ll work together with an accountant who understands the details of your business . They will have a great deal of pride in seeing your business grow.
5. Remove your tax worries
Taxes are a bit complicated. The HMRC guide to expenses exceeds 100 pages So it’s no surprise that a lot of small-scale business owners are concerned about their tax obligations.
It is important to make your year-end company accounts and prepare abbreviated accounts for your company when appropriate, prepare the personal tax returns, create corporate tax computations and returns and VAT calculation submissions, contact HM Revenue and Customs, manage Companies House and sort your payroll can be a hassle which can be averted by a good accountant.
Your accountant will create everything you require, saving you cash and providing peace of mind while helping you get on managing your business.
