So you’re self-employed, or a small business owner, and wondering whether it is worth paying an accountant’s fees for the first time. Or maybe you already have an accountant, but you are concerned that your money would be better spent in other aspects of the business.
If you have started a business then you are likely an expert in your field of choice, but with taxes, profits and losses, liabilities, regulations and the like all needing to be considered, you actually need to be somewhat of a financial expert simultaneously. This can be incredibly daunting, especially if you are having to learn the necessary skills while also carving our your niche in the market. Getting your sales off the ground can require a lot of time – much outside of the usual business hours, and organising your finances on top of this could make you run the risk of stretching yourself too thin. This is probably the most common reason to hire an accountant or bookkeeping service. Below are a number of other situations where talking to an accountant would be a good idea:
If you need help with your taxes
HMRC have a number of tax requirements that you and/or your business are expected to follow to the letter; a big ask considering the long, complicated forms, hundreds of tax codes, and constantly updating legislation. Making a mistake amidst all of this can result in significant fines, as well as missed opportunities to lower the total tax you have to pay.
A good accountant will not just stop you from getting into trouble with HMRC, but can potentially save you more money in tax than they charge in the first place.
If you want some advice on the running of your business
Have you ever asked yourself, is it a good idea to increase the workforce right now? Do you think your margins might not be maximising your potential for growth?
An experienced accountant will probably have worked with hundreds of clients – potentially working in the same industry as yourself. They can, therefore, be capable of helping you develop the business through the implementation of financial planning and budgets, as well as advise you on the correct time to make changes.
By drawing on their past experience, an accountant can ensure that your expectations are realistic with tested figures informing their projections.
If you are looking to buy or sell a business
If you are looking to buy a business, using an accountant is strongly recommended. They will go through the company’s accounts in detail and pick up on details which could potentially be misleading and catch you out – for example, outstanding debts and assets which are not fully owned.
Similarly, when selling your business, you will want prospective buyers to see it in the most flattering light possible. Accountants can structure your finances to this effect, and also help organise the sale so that you receive payment in the most tax-efficient manner possible. Receiving a lump sum for example, instead of monthly payments over a longer term could leave you paying much more in tax.
If you want help interacting with the government and HMRC
On top of tax returns, you will also find yourself having to keep all of your records up to date. This will include:
– Maintaining the records of the directors and administrative personnel
– Documenting share allocation
– Running payroll
And although statistically unlikely, you can also be placed under tax investigation. This is a very important time to consider hiring an accountant if you haven’t already, as they will advise you on how to work through the investigation process and stop you from violating any tax laws after the investigation is over – a time when HMRC will be watching closely.
Ultimately, whether you hire an accountant or not will depend on your personal circumstances. Most small business owners are looking to save money where they can, so might not think that an accountant is affordable. It is important though, to consider just how much your own time is worth. Often, it works out cheaper to hire an accountant than the potential business hours you lose doing taxes and the-like by yourself.
If you find yourself requiring the services of an accountant, please contact Stack & Jones for a free 1-hour consultation on 01869 277973.
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