A good account is an invaluable part of running a successful contracting limited company. With their assistance you make sure to never miss a filing deadline, find the most efficient way to take money from your company, and plan ahead to make sure there are no nasty financial surprises or unexpected tax bills. But with over 22,000 accountancy firms operating in the UK, how do you choose the best one for you? Here are a few tips to help you narrow the field and find the firm for you.
Know what you need. Having said that there are over 22,000 firms in the UK, most of them will not be right for you. Many will be in-house, or specialise in working with big firms. There are two problems with using these as a contractor; first the accounts required for larger firms are different from those filed for smaller companies like contractors, secondly as a one-person company in a client-list of commercial giants there is a risk that you get overlooked.
Prioritise skills over location. With no physical product, contracting is unlike manufacturing, retail, farming or most other industries, giving it a unique type of cash flow, and some specific tax rules such as IR35. Most contractors find they get the best results from a firm that describes itself as a contractor accountant. Having an accountant who understands the nature of your business is more important than having an accountant with an office on the high street.
Do you really need face-to-face meetings? In the modern business environment the nature of keeping in touch with your accountant has changed. For most contractors 24 hour access is key. Leading contractor accountants offer online portals that allow clients to upload details of expenses or view a snapshot of the company’s accounts. Equally important is being able to contact somebody by phone or email whenever you need to discuss something. The best firms will give you a named point of contact, so that you consistently deal with the same person, who knows your company.
Per hour, per task or monthly package? Accountants will typically charge in one of three ways; per hour, per specific task (e.g. VAT filing, or year-end accounts), or a fixed monthly cost covering various tasks for the company’s year. Most contractors will find that it is best to take up a monthly package, that way you fix your costs and have an accountant working for you year-round.
What does the package include? If you are taking a monthly package, it is important to check what you are getting. As a minimum you should expect services to include filing the company’s Corporation Tax return, Companies House annual returns and confirmation statements, quarterly VAT filings, running your PAYE payroll if you plan to take a salary from the company and filing your personal Self Assessment Tax Return. Some accountants will charge extra for one or more of these services. A good approach is to ask what services are not included.
What do they charge? As with any service, it’s important to shop around. Full-service contractor accountancy packages start at around £85 per month plus VAT, while some large firms offer the same package for double that. Get several quotes.
What do others think? Of course shopping around isn’t just about price, it’s about service too. Look for feedback from others. There are of course review sites online, but the best feedback comes from people you know. If you know other contractors who have the same standards and expectations as you, ask them what they think of their accountants and if they would recommend them.