For those who are contractors freelancer or small-scale company understanding the aspects of tax-related issues for your business is likely not the first thing you’re thinking about. This article explains why hiring an accountant could make business sense.
When you first begin to establish yourself as a freelancer or even as a small company one of the most important 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.
If you are self-employed, each penny is important, from the cash arriving, to the money being paid out. Making sure you keep track of everything is a task by itself, yet it’s easy to think of the accountant as a mere expense. There are plenty of reasons to pay that amount to hire an experienced accountant could increase the success of your company. Here are the top five advantages accounting professionals can provide your company.
1. It could save you time.
When you begin working on your own, be it as a contractor limited business owner, a consultant or freelancer Your goal is to build a revenue and to fulfill the task 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 could take away time from the work at your hands.
Employing a cheap accountant who is up to date with the most recent tax laws, rules , deadlines, and someone who is completely aware of the formats HM Revenue and Customs requires for all of the data, can make it easier to save hours of time spent scouring the website of HMRC, allowing you with the time to work more effectively.
2. Reduce the tax burden
An experienced accountant will know the best ways to save you money as well as give you sound advice regarding the most tax efficient method to run your company.
Understanding the most efficient method of operating whether self-employed or as the limited-company (external link) and the most tax-efficient method to withdraw money of your business is something they will advise you through depending on your personal circumstances and needs.
They will also go through the process of paying yourself dividends, knowing the limitations on what you are able to and cannot be claiming through company expenses and the advantages of the VAT flat rate scheme.
Flat rate VAT (FRS) is an incentive provided by the government that allows customers to add VAT to their invoices for the regular rate (20 percent in 2014) however, you must pay HMRC back with less of. For instance, if you’re an IT consultant with little VAT-related expenses, you will only have to pay 14.5 percent back to HMRC under this scheme and save the difference as your profits.
A professional accountant can provide you with the most accurate guidance on whether or not the FRS will be a good fit and improve your business.
3. Avoid paying taxes and penalties
One of the main factors when it comes to finances and working from home is staying on top of paperwork and staying clear of any penalties due to late payment. For certain people, this is a part of their work they enjoy and are content to stay up-to-date with. For those who don’t, an accountant is logical so that they don’t have to worry about deadlines that are coming up, and be up to date with current laws and make sure they don’t fail to meet an important tax deadline.
Be aware of your tax returns, whether assisted by accounting professionals or without can aid in keeping your financial health by avoiding penalties that could vary from PS150 for the day after the in submitting annual accounts, to a massive fine of PS1,500 for a delay of 6 months.
These are only the penalties for late with your annual accounting but this does not include penalties for being lateor have submitted the wrong forms for self-assessment tax returns tax return, VAT return, and corporate tax. Your accountant will stay on top of deadlines, so that you don’t have to.
If you’re currently an independent contractor, or are thinking of the possibility of becoming a contractor or own company that hires contractors, you must be aware of a lot of tax implications that you need to be familiar with. Self-employed contractors who work through a limited company may enjoy tax benefits however you must comply with the IR35 regulations to be able to claim the benefits legally.
4. Let us help you expand your company
An accountant who is knowledgeable will provide you with knowledge and guidance in helping you increase and expand your company.
Typically , clients are assigned their own accountant which means that from the first day you’ll be working together with an accountant who understands the specifics of your business . They will have a great deal of pride in seeing your business grow.
5. Remove your tax worries
Tax is a complicated subject. The HMRC guide to expenses has more than 100 pages So it’s no surprise that a lot of small-scale business owners are concerned about tax issues.
You must remember to create your annual company financials as well as prepare abbreviated company accounts when appropriate, prepare the personal tax returns, create corporate tax computations and returns as well as VAT calculation submissions. contact HM Revenue and Customs, manage Companies House and sort your payroll. This is a huge burden which can be averted with the help of a professional accountant.
Your accountant will create everything you require, saving you money , and giving you peace of mind, permitting you to continue managing your business.