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Do I Need An Accountant?
Stephen Mackie, Assistant Accounts Manager ,M&S Accountancy and Taxation LLP
by Stephen Mackie, M&S Accountancy and Taxation LLP
Setting up in business is exciting, slightly scary and immensely liberating – often all at the same time! The scary part comes from not knowing everything – who should I bank with, who will design my logo and do my marketing, do I need an accountant, etc.? These are the kind of issues that Business Gateway can help with, and as regards the last one – ‘do I need an accountant?’ - the best way to find out is to have a chat with one!
Accountants have, let’s be honest, an image problem that might put some people off. But they are in business, just like you, and their success, like yours, depends on the quality of their service. So what should you expect from your accountant – and do you even need one? If you’ve just set up in business, here are some basic financial questions you need to ask yourself.
- What do I expect my turnover to be?
- What level of margin (percentage return on my sales) do I need to make?
- How complex is my business – am I selling a simple service or are there lots of product lines? How will I account for multi-product lines, inventory, sales and returns?
- How many people will I employ – if any? How do I set up systems to pay them? How do I account for their taxes, NI, etc.?
- Can I employ my wife/husband/ partner?
- Do I need to be registered for VAT? And if so, what about VAT returns?
- What do I do about National Insurance?
- Will I be doing any business overseas, using foreign currencies?
- What about a company vehicle? Can I offset this against tax?
- Following on from this, what else can I claim against tax?
- Can I start my tax year at any month or does it have to be the same as the government’s fiscal year (April – March)?
- What’s Cloud Accounting and does it make my life easier?
We could go on and on, but you’ve probably got the idea by now. If you have a simple business with straightforward services and don’t want to be VAT registered (and won’t have a turnover in excess of £81,000 in which case you have to be VAT registered), and you are good with numbers and understand your way around a P&L and Balance Sheet, then you may well be able to do your own accounts. However, we’re constantly struck by the number of people who set up in business and then come to an accountant for help because they have encountered problems – either with HMRC or just with a simple issue such as “why could I claim all my lunch expenses when I worked for a company but I can’t now I work for myself?”
So, if you’re not sure, do go and seek out a qualified accountant, especially one who is also a Chartered Tax Adviser, and have a chat. It won’t cost you anything (or it certainly shouldn’t!) and you’ll probably be amazed at how much they can bring to your business.