Overseeing accounting and taxes is seldom a director’s favorite duty. It may be time-consuming, irritating, and a waste of important time that should be spent growing your company. An accountant is a lifeline for around 61% of firms in the UK, but does your Limited Company Accountancy Services need one?
Although it is not required by law for limited firms to engage an accountant, there are several advantages to doing so, such as preparing your yearly accounts and company tax return. They may also handle tax registration for new businesses.
What can an accountant do for my small business?
Hiring a professional to manage your company’s accounts is like letting a genie out of a bottle if you’ve ever desired for more hours in the day. Even better, there is room for more than three wishes, with a variety of services available to make your life simpler.
Starting a new business
If you like, your accountant may register your company with Companies House, reducing your burden in the early days of your new venture. They may also advise you on your new tax obligation and help you register for VAT, Corporate Tax, and payroll if you are an employer.
Payroll
Payroll is often conducted in-house by major corporations, but for smaller firms, it is beneficial to outsource it to your accountant. Or, you might say farewell to the hours you spend each month drowning in income tax computations and HMRC paperwork. Thankfully, there are payroll professionals who like doing so (each to their own).
They will handle the details and ensure that your firm complies with all essential rules and legislation, allowing you to focus on more interesting things. It’s also worth noting that outsourcing may help you save money on payroll software and training.
VAT
VAT – if these three letters make you nervous, you’re not alone. VAT is notoriously difficult to understand, and the requirements are always changing. Your accountant will assist you in navigating your company’s VAT duties and selecting the appropriate payment arrangement so that you do not overpay. They may also help you with your quarterly VAT returns and guarantee you don’t get hit with any unexpected penalties.
Bookkeeping
Accounting is another time-consuming, tedious, but necessary activity for small businesses. Recording every transaction and invoice may seem like a chore, but nobody wants to be searching for missing documents at the end of the year (or if HMRC comes knocking). Accountants, on the other hand, are careful creatures who can manage your accounting with maximum efficiency, further freeing up your time and mind space.
Yearly financial statements
Each year, as a limited company, you must submit your annual accounts with HMRC and Companies House. Failing to comply may result in severe penalties, and in certain situations, businesses may be taken off the register and face legal action.
This will not happen, according to your accountant. They will compile and create the relevant documents and ensure that it is filed on time (if not before). This will comprise a balance sheet, a profit/loss account, a report from the company director (that’s you), and any other pertinent notes, depending on the size of your organization.
Returns on Taxes
Together with your annual accounts, your limited business will receive a notification from HMRC to file a tax return at the end of each fiscal year. The goal is to report your taxable profit, albeit you must still submit it even if you make a loss or are below the tax threshold.
A profit/loss account is necessary, but a different version from the one given in your yearly reports to make things more interesting. It should display your adjusted earnings, which are gross income minus costs and investments. The paperwork might be intimidating, but your accountant can help you prepare it and determine how much Corporate Tax you owe. They may also send out reminders about when the payment is due.
Advantages of Hiring an Accountant
If you’re still debating whether to hire an accountant for your limited business, consider the time you’ll save spreadsheet surfing and dealing with paperwork, as well as the monetary cost.
Consider the peace of mind you will receive from knowing that your money is in the hands of professionals and that you will not be caught off guard by a bewildering variety of rules, laws, and legislation.
Next, consider the savings in possible tax efficiencies, avoiding penalties, purchasing accounting software, and training. The genie is nothing compared to a dependable accountant (except perhaps for the outfit).