Now that you have found that trading through your limited company may be the best option for you as a contractor, it is time for you to go and have a look for a contractor accountant.
Ensuring that you choose the perfect contractor accountant for your needs is fundamental for maximising your take home pay by decreasing your tax burden. This should be done whilst being completely compliant with HM Revenue & Customs’ legislation. Below are our top five tips for helping you choose a contractor accountant:
- Are they specialists?
Contrasting to high-street accountants or many accounting software packages, specialised accountants working with contractors and freelancers fully understand the rules associated with tax for the self-employed better. Through using a contractor accountant, you can be provided with knowledge on how to maximise your take-home pay through minimising your tax burden via strategic tax planning.
To have your unique circumstances and needs met, a contractor accountant should be consulted so you can determine the best method to pay yourself. This can range from using an umbrella company, sole trader contracting or becoming a Director of your limited company.
- What kind of technology do they use?
The majority of contractor accountants embrace technology as a way of streamlining their accounting processes. Something that should be considered when looking for a contractor accountant is whether or not they provide a mobile-responsive client portal, where you can view your finances in real-time.
Nowadays, it is expected that you as a contractor should not have to be downloading spreadsheets from your accountant to record your expenses – this should be easily done through a client portal. The accountant that you choose should be taking advantage of technology that makes the administration which you are required to do as quick and hassle-free as possible.
- What level of support do they offer?
Another important question to ask when searching for a contractor accountant is whether they will be providing you with one dedicated point of contact, or will there be a team to assist you. There are costs associated with both options; one contact point can be useful as they will always be up to speed with your particular situation. On the other hand, if this person is not available because they are on holiday or helping another client, this is where a team of individuals help you becomes the ideal option. They will get to know your circumstances and will be there to help when another person is unavailable.
‘Unlimited support’ is also a key quality to look for in an accountant, and in particular ‘unlimited tax advice’for instance digital tax or offshore schemes. Helping you minimise your tax burden is one of the first jobs that a contractor accountant should be helping you with such support and advice with regards to your finances should not be an added cost
- Do they offer other ‘value-added’ services?
It is important to look into whether the accountant charges for setup, limited company incorporation and if they help you set up your business bank account. These services are added-value extras, not offered by every accountant. A way of determining a good accountant from a not so good one is if they include the above services within their package. However, some accountants choose to charge a one-off fee to get you setup with their service of possibly over £100.
- Look carefully at the specific services you are getting for the fee
The level and value of services that you are receiving for the price you pay is far more important than comparing who is charging the lowest fee between different accountants. Fees can range from between £70 to above £250 monthly, depending on the contractor accountant and the service they offer. It is possible that the lower priced firms rely heavily on software, meaning you are required to complete your own invoicing or bookkeeping. For many contractors and freelancers, the best service for them is an all-inclusive package. If this applies to you, then you should be looking for the kind of service where additional extras like tax planning are not charged on top of the fee.
It is well worth thoroughly researching for the right contractor accountant that you need, as higher accountancy fees pay for the service you are receiving and the tax savings you benefit from. This especially applies if the chosen firm is compliant, well-established and contracting specialists. To summarise, being confident, comfortable and having open communication with the accountant you choose is the most important thing. Your decision should not be entirely based on the price charged.
The tips provided here are just a few of the vital qualities that you should look for when searching for a contractor accountant. This decision should not be a flippant one, and doing your due diligence to ensure you are getting the best value for your money is essential.