Do you need an accountant for a limited company?

Company directors’ favourite responsibility is usually not overseeing accounting and taxes. It can be taxing, aggravating, and time-consuming, robbing you of time that could be better spent growing your company. Around 61 percent of firms in the United Kingdom rely on the services of an accountant, but do you need one to file limited company accounts?

While using an accountant is not required by law for limited firms, there are numerous advantages to doing so, including completing your annual accounts and company tax return. They can also help new businesses with their tax registration.

What services can an accountant provide to my small business?

Hiring a professional to manage your company’s finances is like letting a genie out of a bottle if you’ve ever desired for more hours in the day. Even better, with a variety of services available to make your life easier, you can fulfil more than three wishes.

By boosting tax efficiency and optimising cash flow, an accountant can save you money in a variety of ways. They can provide vital general assistance by delivering general business advice, discussing your ideas, and discussing your future growth goals.

Above all, a professional accountant gives you the trustworthy financial data you need to make important decisions.

Starting a new business is a big step.

If you like, your accountant can register your company with Companies House, reducing the amount of work you have to do in the early days of your new company. If you’re an employer, they may also advise you on your new tax obligations and work with HMRC to register you for VAT, Corporation Tax, and payroll.

Further Reading: What are the filing requirements of a limited company?

Payroll

Payroll is typically handled in-house by major corporations, but it is beneficial to outsource it to your accountant if you have a small firm. Alternatively, you may say goodbye to hours of your monthly life spent drowning in income tax calculations and HMRC paperwork. Fortunately, there are payroll experts that prefer working in that environment (each to their own).

They’ll take care of the details and ensure that your business follows all applicable regulations and laws, allowing you to focus on more exciting things. Outsourcing can also save you money on costly payroll software and training.

VAT

VAT (Value Added Tax) — you’re not alone if these three letters give you the creeps. VAT is infamous for being difficult to understand, and the rules are always changing. Your accountant will guide you through your company’s VAT responsibilities and help you select the best payment method to avoid paying too much. They may also make quick work of your quarterly VAT returns, ensuring that you avoid any fines.

Bookkeeping

For small businesses, bookkeeping is another time-consuming, tedious duty. It may seem tedious to keep track of every receipt and invoice, but no one wants to be searching for missing papers at year’s end (or if HMRC shows up). Fortunately, accountants are careful individuals who can efficiently handle your bookkeeping, freeing up even more time and mental space for you.

Accounts yearly

You must file yearly accounts with HMRC and Companies House as a limited company every year. Failure to do so may result in severe fines, and in some situations, companies may be removed from the register and face legal action.

This will not be permitted by your accountant. They will compile and generate the required papers and ensure that it is filed on time (if not before). A balance sheet, profit/loss account, a report from the company director (you), and any other pertinent notes will be included, depending on the size of your organisation.

Returns of income tax

HMRC will send your limited business a notice to file a tax return at the end of each financial year, in addition to your annual accounts. The objective of this is to disclose your taxable profit; however, even if you made a loss or are not required to pay tax, you must still submit it.

A profit/loss account is essential, but it must be a different version than the one in your annual reports to make things a little more interesting. It should display your adjusted profits, which are gross income minus expenses and investments. Although the paperwork can be intimidating, your accountant can help you prepare it and calculate how much Corporation Tax you owe. They can also send out reminders about when the payment is due in a timely manner.

The Benefits of Hiring an Accountant

If you’re still debating whether or not to hire an accountant for your small business, consider the amount of time you’ll save spreadsheet surfing and fiddling with paperwork, as well as the financial cost.

Consider the peace of mind you’ll experience knowing that your finances are in capable hands and that you won’t be caught off guard by a bewildering array of rules, regulations, and laws.

Finally, consider how much money you’ll save by avoiding fines, purchasing accounting software, and receiving training. A trustworthy accountant has nothing on that genie (except perhaps for the outfit).

Further Reading: A Guide To Accounting For Limited Companies

Is this accountant a good fit for you?

Because personality is important in every relationship, it’s a good idea to see your accountant in person before hiring them. Because you’ll be working closely together, it’s critical that you have a personal connection.

To ensure that they can satisfy all of your requirements, inquire about their service offerings.

Talking about qualifications and experience is also a good idea. Are they certified by a reputable UK organisation? Many professional organisations demand that its members have the requisite education and experience.

Different bundles will be offered by accountants.

You might want to pay an accountant on a monthly basis, for example. This means they’re in charge of your entire financial situation. They could also charge you per hour.

Depending on how involved you want your accountant to be, you can pick the most appropriate solution.