As a contractor working through my own Limited company do I need an accountant?

As a client of SJD Accountancy, all your company needs and personal tax affairs are covered by our complete business package for a fixed fee of just £110 plus VAT per month. This includes:

• Preparation of company Year-End Accounts*
• Corporation tax computations
• Payroll bureau
• Dividend administration
• Dealing with Inland Revenue and Companies House
• Completion of VAT returns
• Completion of annual return
• Your personal tax return
• Access to your own dedicated tax expert for all help and advice
• Free bookkeeping software

In fact everything you need, so you will never have to worry about your tax or accountancy affairs again.

Now could you do all this yourself and save £110 plus VAT per month? The simple answer is probably ‘yes’. If you had the time, inclination and patience to learn what to do and also to keep abreast of the UK tax system, all regulations and legislative changes then you could get away with just having an accountant prepare and submit your end of year accounts.

However, the production of a financial statement purely based on invoices and receipts isn't a very satisfactory way to manage your tax affairs and it isn’t possible for an accountant to add value to your business retrospectively. Realistically, you need ongoing, proactive advice throughout the year and not just at the end when it will probably be too late to save you from an excessive tax bill. Poor tax planning (or even worse no tax planning), costs that are classed as ‘benefits in kind’, an overdrawn directors loan account and financial penalties due to late/incorrectly submitted tax submissions could all lead to financial difficulties.

To put it another way, you could learn to rewire your house, service your car or even build an extension but why would you? Wouldn’t it make far more sense to save the hassle, worry and time and hire the services of a professional.

In plain English your accountant should:

• Help you to structure your company in the most tax efficient way possible.
• Help you to understand the best way to take money out of your company.
• Understand what you can claim by way of expenses and the impact on your income and taxes.
• Help you to understand all of your tax liabilities both personal and corporate, these include:
• Employers National Insurance contributions
• Employees National Insurance contributions
• Personal income tax
• VAT (Flat Rate Scheme or standard VAT)
• Corporation tax
• Prepare and complete your personal self assessment tax return each year.
• Understand when, how much and where to send payment for all taxes that are due.
• Explain the benefits of not taking every penny out of your company along with other tax planning opportunities.
• Send e-mail and mobile text alerts so you never miss a deadline; we understand that you are busy and may miss one notification this is why we produce several.
• Preparation of Company Year-End Accounts to be produced within 30 days of us receiving all the relevant information from you.

You will also have access to your dedicated tax expert via telephone, e-mail and face-to-face meetings where necessary.

For those who would like more detail, listed below is an even more comprehensive list of what SJD will do for you.

Year end accounts

• Fully reconcile your bank accounts.
• Analyse other income, sundries, check allowed/disallowed expenses.
• Provide suggestions for items that are not being claimed.
• Preparation of Company Year-End Accounts to be produced within 30 days of us receiving all the relevant information from you.
• Calculate Corporation Tax payable and advise you of the amount and date for payment.
• Prepare Final Accounts, CT600 for HM Revenue and Customs and Abbreviated Accounts for Companies House where necessary.
• Send final paperwork to you for signature and return. And yes we will remind you and chase you, as we understand you may have missed our initial letters/e-mails and telephone calls.
• Submit Accounts and CT600 to HMRC and Abbreviated Account to Companies House on your behalf.
• Send email and text reminders to you and, if you send cheques to your accountant, they will make sure they reach HMRC with the correct filing information i.e. corporation tax reference, company incorporation number, company name, accounting period details.

Payroll bureau

• Record P45 details, prepare and submit P46 if necessary.
• Calculation of gross salary, tax and NI amounts due to the Revenue.
• Manage your payroll to include: detailed summary with advice of payment to make to HMRC and detailed wages book to show net pay for employees (although you are a director of your own company you are also an employee).
• If relevant, we will produce end of year IR35 calculations and advice for payment.
• Salary information provided for the Director i.e. you and one other employee, usually Company Secretary. Although, if you are a new company you probably won’t have a Company Secretary as regulations changed early this year (2008) removing the need to have a Secretary.
• Prepare and submit end of year P35’s and P14’s to HMRC.
• Prepare end of year P60 and send to you for your records.
• Set up new employees/remove employees on your payroll.
• Organise and manage overpayment and underpayment notices throughout the year.
• Change of Revenue Office details.
• Organise HMRC payslip booklets and provide support and advice on their completion.
• Manage any change in tax codes.
• Prepare P11d once you have completed your annual (online) questionnaire and submit to the Revenue. If you have benefits in kind we will calculate the tax due and advise you of any payment the Revenue will be looking for.
• To help us complete the above we will ask you for your P45 and confirm your IR35 status (we are happy to review any IR35 contract however this is outside the scope of normal work and as such we charge a small amount which is of course fully tax deductible).

Dividend administration

• Help you to understand the level of corporation tax due following dividends taken from your company.

Dealing with Inland Revenue and Companies House

• We will handle all incoming HMRC and Companies House enquiries on your behalf.

Completion of VAT returns

• Send email and mobile text reminders at the end of each VAT quarter.
• VAT registration advice.
• Completion of quarterly VAT returns.
• Review of spreadsheet for accuracy.
• Advice with regards to whether you would benefit from the Flat Rate Scheme.
• Flat Rate Scheme application if necessary.
• Ongoing VAT advice.
• Help with any under/overpayment.

Completion of Annual Return

• Prepare all Annual Returns.

Personal Taxation

• Send email and mobile text reminders throughout the year to remind you to complete your online questionnaire.
• Prepare and submit your personal tax returns.
• Calculate any tax due together with payments on account.
• Review and if possible reduce the payments on account for the following year. 

Direct access to your tax expert for all help and advice 

• Telephone calls, emails and face to face meetings where necessary.
• You will be given your own tax expert with whom you will have direct contact with.
• We have very strict service level agreements which guarantee all emails received by us by 4pm will be replied to the same day.
• SJD will support you fully and act as an intermediary between you and all HM Revenue and Customs correspondence and contact with regards to VAT, PAYE and other tax related issues.
• We will of course keep you fully updated with regards to changes in tax law and the UK tax system that may affect you.

Free bookkeeping software

• We will provide you with our specially designed bookkeeping spreadsheet which we will ask you to forward to your tax expert each month.

As we said earlier you could do all this yourself but why would you?

If you have any questions about contracting or would like any further advice please call our New Client Services helpdesk on Freephone 0500 152500 / 01442 232700 or email michelle.turbutt@sjdaccountancy.com