banner

8 Essential Steps to choosing the Best Contractor Accountant

08 May 2021

No doubt, a good accountant is vital for both the first time contractor and the longstanding pro.

Having the right contractor accountants London means having a dependable personality that will handle your tax paperwork and guide you through the complicated IR35 so that you can stand with confidence if HMRC investigates you.

Like you know, hiring No doubt, a good accountant is vital for both the first time contractor and the longstanding pro.

Having the right contractor accountants London means having a dependable personality that will handle your tax paperwork and guide you through the complicated IR35 so that you can stand with confidence if HMRC investigates you.

Like you know, hiring contractor accountants is a personal decision. Since they are the people you will work very closely with, they need to be trustworthy and build a lasting relationship.

So, how can you ensure that you get it right?

When should I hire a contractor accountant?

Let’s handle this very important aspect before heading on to how to choose the right contractor accountant. So, when should you hire a contractor accountant? It is before you even start. It may be true that you are yet to make money from contracting, but hiring one right away would do you some good:

  • They will ease your process of setting up as a contractor
  • They will give you good advice on tax obligations.

The 8 points to consider when hiring a contractor accountant

Their qualifications

Maybe you forgot, but do not hire an accountant if they are not suitably qualified.

The least qualification you can consider is the AAT foundation certificate which is an entry-level qualification. Holders will have a good knowledge of costing, bookkeeping, and other fundamental financial issues.

Experienced accountants will likely 

  • Have a more advanced AAT qualification, an accountancy degree, or a CIMA, ACCA, or ATT qualification
  • Be affiliated to a professional body like:
  • ICAS - Institute of Chartered Accountants in Scotland 
  • ICAEW  - Institute of Chartered Accountants in England and Wales 
  • ACCA  - the Association of Certified Chartered Accountants  
  • CIMA - the Chartered Institute of Management Accountants 

You should see the qualifications and memberships of an accountant on their websites, business cards, and other marketing materials. However, you will need to search for them on the member directories of the professional bodies to confirm their credentials.

Is contracting their speciality?

Contractors need to comply with some tricky and complex legislation like the IR35 and the rules round expenses, and there could be severe financial consequences if you do not get them right. You should also strive to have lower taxes and ensure that you do no defy HMRC’s rule when declaring your dividends.

However, not every accountant understands the work of contractors or how they are paid or even updated with the latest tax laws as it concerns contractors. So, you will want to work with someone that has a good knowledge of these aspects.

Accounting firms vs individuals: making the best choice

Some businesses have just one accountant, while larger firms could have thousands. They are advantages and disadvantages associated with both. 

The larger firms will have a broader skillset, but they must have worked with contractors before. So you can trust them for more valuable additional services like legal support and financial advice. However, you will be a lower-priority client to them, and you will get the services of their junior accountants. Also, you may pay more.

The individual or a smaller firm, on the other hand, will give you more customised services at a lower cost. However, may not have the expertise or meet your expectation in-house or offer additional services like the larger firms. They may also be less responsive when they become busy or meet higher-paying clients.

How good are they with technology?

This has to do with how you will send your contractor accountant your financial information and how they will return the finished work to you. Will everything be paperwork or online?

This is a personal decision as HMRC does not specify the format you should put your financial records. They just need to be accurate, complete, and readable.

However, you may want to go a step ahead of the Making Tax Digital concept by the government by choosing an accountant that can comfortably work with technology.

What is their charge?

You can pay your accountant anywhere between £25 and £100, or more a month. It is worth knowing that many accountants do not include VAT in their charge, so you should be prepared to add 20% to their fees. So if your accountant is charging £35 a month, you will pay £42 monthly.

With this fee, your accountant should 

  • Prepare your annual company accountant
  • Handle your tax returns and VAT filings
  • Handle your correspondence from the Company’s House and HMRC
  • Give you a range of contact hours to reach out for support and answers about tax-related matters.

What is out of the contractor accountant’s fees?

You should know what is not included in their free quotes. So, you may want to find out about services like:

  • Limited company formation
  • Company’s House filings
  • Personal tax calculation and self-assessment tax returns
  • Payroll
  • References (if you are applying for a mortgage)

Your accountant may ask you to sign an engagement letter which will specify what is includes in their fees and what they don’t cover. But do not hesitate to ask if you do not still understand.

Their reputation

Are they known for good services, or is all they have for their branding are shiny logos and a fancy website? Check Google reviews and comparison sites to find out about the quality of their services. However, know that not all the reviews may be genuine.

How quickly do they respond?

You need a company you can fall back to when you need advice or things are not going well financially. It will be frustrating to deal with an accountant that is not reachable or takes forever to respond. They must be timely to ensure you do not miss deadlines and fall into trouble with HMRC.

Though you may not know this before signing up with them, you need to get the email and phone number of the accountant you will be working with before you sign up. 

Getting a good contractor accountant is worth it

It may feel costly to hire a contractor accountant in the UK if you are just starting, but they could save you all the troubles. But whether you are just starting or have been in the business for quite a while, you have a lot to gain by choosing National Accountants in London for your accounting concerns.

Call Back Call Now Enquire Now