For those who are contractors freelancer or small-scale company knowing the details of tax-related issues for your business is likely not the first thing you’re thinking of. This article explains why hiring an accountant could make business sense.
When you first begin to establish yourself as a freelancer or even a small-scale company one of the primary tasks you’ll need to live up to is tax issues. Alongside a dependable insurance policy for freelancers You may discover that accountants play an important part to play in the success of your company.
If you are self-employed, each penny is worth it, from the money entering the bank, to money that goes out. Monitoring the entire process is an obligation by itself, yet it’s easy for people to view accountants as just another expense. However, there are many reasons to spend that amount to hire an accountant who is competent can aid in the growth of your business. Here five of the benefits that an accountant in York can provide to your company.
1. It could save you time.
When you begin working as a self-employed individual, whether as a contractor limited business owner, a consultant or freelancer the goal is to build a profits and complete the tasks you’ve won.
The process of completing the paperwork, keep track of your expenditure and the new information that is arriving is time-consuming and can even take time away from the job at your hands.
A professional accountant who is up to date with the most recent tax laws, rules , deadlines, and one who fully comprehends the formats HM Revenue and Customs requires to receive all information, will help you save hours and hours of time spent scouring the HMRC website, allowing you with the time to work more effectively.
2. Reduce your tax obligation
An experienced accountant will know the best ways to save you money as well as provide you with sound advice regarding the most tax efficient method to run your company.
The best method of operating whether self-employed or an LLC (external link) and the most tax-efficient method to withdraw money of your business is something they can guide you depending on your personal circumstance and circumstances.
They will also go through the process of paying dividends and understanding the limitations on what you are able to and cannot claim as company expenses, and the advantages of the VAT scheme with a flat rate.
A flat-rate VAT program (FRS) is an incentive offered by the government which permits customers to add VAT to their invoices for the regular rate (20 percent in 2014) however 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 to HMRC under this scheme, and keep the remainder as profit.
A professional accountant will provide you with the most accurate guidance on whether or not the FRS is suitable and will financially help your company financially.
3. Avoid paying penalty and tax fines
One of the main factors when it comes to financial matters and working for yourself is staying on top of your paperwork and avoiding any penalties due to late payment. For some , this is an essential part of the job they’re satisfied to be current with. For others, hiring an accountant is beneficial so they don’t have to worry about deadlines that are coming up, and be aware of the most recent legislation , and also ensure that they don’t fail to meet the tax deadline.
Be aware of tax filings, whether assisted by the accountant you use or not 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 staggering PS1,500 fine for a delay of six months.
This is only the penalty for late with your annual accounting but this does not include penalties for being lateor have submitted your forms in error to submit your self-assessment tax return tax return, VAT return, and corporate tax. Your accountant will be 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 an organization that employs contractors, you must be aware of numerous tax implications you should be aware with. Self-employed contractors who work through a limited company may enjoy tax benefits however, you must be in compliance 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 be a valuable source of knowledge and guidance in helping you increase and expand your company.
Typically , clients are assigned an accountant who is their own, therefore, from the beginning you’ll be working alongside an accountant that understands the details of your company and have a great deal of pride in seeing your business flourish.
5. Remove your tax worries
Taxes are a bit complicated. The HMRC guide to expenses has more than 100 pages So it’s no surprise that a lot of small business owners fret about their tax obligations.
You must remember to make your year-end company accounts and prepare abbreviated accounts for your company as needed, and then sort the personal tax returns, create the corporation tax computations and returns and VAT calculation submissions, contact HM Revenue and Customs, handle Companies House and sort your payroll. This is a huge burden that is easily avoided by a good accountant.
Your accountant will create everything that you need, thereby saving money , and giving you peace of mind while permitting you to continue managing your business.
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