How To Choose A Contractor Accountant

The best contractor accountants will handle your tax papers and ensure that you don’t pay more than you should. More significantly, they’ll give you advice on technical rules like IR35, so you can focus on your business without worrying about what might happen if HMRC launched an investigation.

Choosing a contractor accountant is, of course, a personal decision. You’ll be working closely with them and entrusting your money to them (hopefully for many years to come).

So, how do you know you’ve made the best decision?

When is it appropriate to use a contractor accountant?

Before we go into how to find a contractor accountant, let’s talk about when you should hire one. While it may seem like a large outlay — especially if you haven’t yet generated any money from contracting — it’s worthwhile to hire one before you begin for two reasons:

• They’ll make the process of becoming a contractor a lot easier.
• They’ll help you understand your tax requirements.

Unless you work through a limited company, most end-clients and recruiters will refuse to hire you. As a result, you’ll have to decide whether to join an umbrella company or form your own business.

If you decide to go it alone, a professional accountant can help you set up a limited company and ensure that it complies with all legal requirements. Other obligations, such as registering you as an employer (which you’ll need to do in order to pay your salary), will be handled by the accountant.

More importantly, your accountant can advise you on how and when to deduct business costs, as well as record-keeping and remaining compliance with applicable laws. That way, you can ensure that all of your Is are dotted and all of your Ts are crossed straight away.

RELATED: Accountants guide to starting up as a contractor

Experience

In the United Kingdom, there are many contractor accountants, some of whom have been in practise for a long time (upwards of 20 years). Rather than hiring a new contractor accountant who has just been around for 5 minutes, seek for one with a lot of industry expertise.

We’re not arguing that new accountants won’t be amazing; in fact, some will. If you’re new to contracting, though, hiring a contractor accountant who has assisted thousands of other new contractors is an excellent option.

Reputation

The same method should be used when selecting a contractor accountant. Before enlisting the services of a contractor accountant, make sure to check out their track record. Examine contractor forums, reputable review sites like Google Reviews and Trustpilot, and the accountant’s overall web reputation.

Interaction

Interaction is necessary. How will you communicate with a contractor accountant if you hire one? Will you be allocated a dedicated Account Manager, or will you be promised a (possibly delayed) response time? You must choose an accountant who can assist you and reach your goals.

Also, while not all contractor accountants prefer face-to-face meetings, some do. As a result, if this is important to you, choose an accountant who is close to your location.

Fees for accounting services

There are monthly subscriptions available for as little as £62.50. On the other hand, some bundles are far more expensive, costing more than £240.00 each month.

In general, we agree with the old adage that “you get what you pay for.” As a result, the lower-cost packages will most likely expect you to be more hands-on, whilst the higher-cost products will be the most nurturing. If you’re new to contracting and want the most help, we recommend not going with the lowest accountancy package, which brings us to our next point.

Accountancy packages for contractors

Contractor accounting packages are extremely diverse and differ greatly between vendors.

Do your homework and make a list of all the characteristics you’ll require from a contractor accountant. Then you can utilise this list to find an accounting software that you believe is most suited to your needs. Because it is such a crucial decision, you should spend a lot of time and effort selecting a contractor accountant.

Also, if you enjoy bartering, give it a shot. If you find a package that meets 95 percent of your needs, it’s not a bad idea to inquire about the remaining 5% and see if it may be included to your monthly budget.

Hours of operation

You must determine when you will most likely need to call your accountant. Contractor accountants typically have fairly flexible hours, and some even give services on weekends. Make sure that before you choose a contractor accountant, you choose a company that you can reach out to promptly if you need to. If the matter is critical, the last thing you want to do is write an email and hope for a rapid response.

Professional ties and additional knowledge

You’ve probably heard of IR35 if you’re a limited company contractor. Throughout your contracting career, you will very certainly require extra services such as IR35 assessments, insurance coverage, financial advice, and more. As a result, can your contractor accountant assist you with more than simply accounting?

Many contractor accountants are also IR35 specialists or work closely with IR35 professionals. It’s crucial to follow the IR35 norms and regulations. You could get further support included in your accountancy package, or at a greatly reduced charge, if you choose a contractor accountant with additional products or partnerships with third-party professionals. Insurance companies, for example, are in the same boat. Most established contractor accountants will work with these types of firms to expand their service offerings and add value to their clients.

Added-value services

Many limited company contractors will likely require the services of an umbrella business in the future as a result of changes to off-payroll in the private sector (IR35). Can your accountant assist you in the future if you require an umbrella by moving you to a sibling umbrella company? Or do they have a certified umbrella firm that can help you effortlessly and affordably switch between the two (limited and umbrella)? All of these are important issues to ask before hiring a contractor accountant.

Aside from providing an umbrella solution, an accountant can provide a variety of other services. Personal tax assistance, wealth management, CIS, accountancy for landlords (SPV), and other services are available. If you think you’ll need more than an accountant’s basic services, see if the accountants you’re considering can help you with all of your additional needs.

Accounting software that helps

Each contractor is unique. Some people will adore accounting software, while others will despise it. Many contractor accountants are including accounting software providers into their services because there are some fantastic accountancy software suppliers out there.

Find out what contractor accountants have to offer, regardless of your feelings about accounting software. If you despise software and never use it, make sure you’re not overpaying for an accounting product you’ll never use. Find out what software is available and don’t be afraid to ask for demonstrations if you like the concept of using software to help with the financial part of your limited company.

FURTHER READING: How to find the best contractor accountants