What You Need to Know When Hiring Your First Accountant ?
We know, hiring an accountant is a confusing task. There’s plenty of numbers and tax codes you need to provide, and that’s even before you’ve figured out what your business actually needs. Rather than struggle searching for a new accountant, learn some of the accounting basics and find out exactly what you need.
Bookkeeping
Bookkeeping is the 1st stage of accounting which involves of recording all your business transactions. Both limited companies and sole traders will need to keep records for a certain time period. Bookkeeping acts as the foundation of accounting records and for the rest Hiring an accountant of your accounting, so it’s important to be accurate.
You can either outsource bookkeeping and accounting services by Weaccountax to an accountant or you can do your bookkeeping yourself with accounting software (or a spreadsheet). If you’ve enough techniques to run bookkeeping function it could save you time and money to outsource. However, if you’re not easy with the numbers and haven’t enough time to complete your own books, you should of-course go for outsourced bookkeeping solutions.
Payroll
It is vital to understand payroll process for those limited company having employees. You’ll require sorting out a PAYE scheme for your employees or outsourcing. Outsourcing payroll can be the best option to reduce mind burden, especially when you want to focus on the rest of your business to run.
Whatever you choose to do, it’s your responsibility to make sure a PAYE scheme is set up so your employees get paid. If you don’t you risk a hefty fine from HMRC.
VAT Registration
Whether you’re a sole trader or limited company, you may be required to register for VAT at some point. Even if you don’t need to become VAT registered it could be more tax efficient for your business – so it’s well worth looking into.
You have to register for VAT if your business turnover cross registration threshold, which is £82,000. However, you may consider for voluntary registration even if you are not required to do so. There may be different reasons for voluntarily register, either to avoid fines or to boost business’ credibility with a VAT registration number.
Self Assessment
If you’re a sole trader or a limited company with more complex tax affairs, you will most likely have to fill out a self assessment tax return. Currently this requires filling a yearly tax return that tracks your expenses for the year and allows you to claim business expenses.
However, as per recent announcement “from 2020 tax returns will have to be filled out four times a year, and all online.
IR35
If you’re a contractor, a term that you might come across is IR35. It can be pretty difficult to get your head around, so seeking professional advice about it is recommended.
In short, IR35 is a section of tax that aims to catch out contractors who are operating as limited companies in order to avoid paying the Income Tax and National Insurance contributions that permanent employees pay. If you caught out by IR35 you’re described as a ‘disguised employee’ and will have to bear all the tax you should have paid along with interest.
Cloud Accounting
Do you want to complete your accounting yourself? Don’t live in the Stone Age of spreadsheets? Don’t worry; there is plenty of cloud accounting software, which provides user friendly bookkeeping solutions.
