Legally small businesses don’t need to have an accountant. As long as you file your statutory accounts with Companies House, and corporation tax return with HMRC, if you operate as a limited company, or file your self assessment with HMRC if you operate as a sole trader, you don’t have to have an accountant.
So, do you really need one?
The answer is almost certainly YES. But let’s explore why you might need an accountant before we categorically say yes.
False Economy
A lot of small businesses try to save the cost of an accountant’s fee, by doing the work themselves.
This is often a false economy, because it can easily cost you more than the accountant’s fee in time, energy, blood, sweat and tears to get all your statutory obligations in order, and everything filed in the right place by the right deadline.
If you file your accounts yourself once a year, how long does it take you to figure out how to do that? Can you easily search your brain’s memory banks back to when you did it last year to figure out how to do it again this year? This, in itself, will take time – and that’s time you could be spending on revenue or profit generating activity.
Tax Savings
Do you fully understand the ins and outs of all taxes your business is subject to? And how you can be the most tax efficient, to ensure you don’t have to pay more tax than is absolutely necessary?
If so, fantastic! And impressive! Especially as the tax rules and legislation change so regularly.
If you can’t do this yourself though, you’re going to want to enlist an accountant’s advice and support.
A good accountant will support you and your business to be the most tax efficient and effective possible. It’s likely they will actually help you save money in tax, rather than just cost money with their fees.
Navigate HMRC
HMRC can be a complicated beast to understand, navigate, and get all the information to in the right way and by the right deadline. Are you confident you can do this yourself?
Small businesses are subject to multiple taxes, such as corporation tax, VAT, PAYE, and they all work in different ways! This can be confusing for business owners, and an unnecessary distraction from the revenue and profit generating activities of your business.
Your accountant understands what HMRC need, in what way and by when, which can save you a lot of time and effort, as well as a lot of headaches.
An accountant can also liaise with HMRC on your behalf, so you don’t have to, should the need ever arise. Wouldn’t that be nice!
Business Advice and/or Planning
You will learn an awful lot about business in the course of running your own business. And it’s nice to have a helping hand along the way.
A good accountant will have all encompassing services that will support you and your business with relevant advice and support, as you go about the normal business operations.
If you’re looking to grow your business, a good accountant can help you with this as well.
You should be creating a business plan for your business – it’s best practice for any business, but particularly business’s that want to grow.
If you were to seek funding or financing support, you would absolutely need a business plan to help you secure this. An accountant can help you with this too.
Peace of mind
Overall, having an accountant for your business will provide you peace of mind in all areas of finance and tax.
An accountant should support you to save time as well, so you can focus on revenue generating activities, rather than being bogged down in bookkeeping, or figuring out how to file a corporation tax return in an iXBRL format (because that’s how it needs to be done, don’t you know!).
You should be tip top in tax efficiencies with the support of an accountant too.
So, what do you think? Do you need an accountant for your business?
If the answer is yes, and you’d like to talk to us, book a Discovery Call and let’s have a chat.