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Do I need an accountant to set up a company?

(4 Posts)
WitteryTwittery Thu 06-Oct-16 21:45:44

DH currently works for a company doing driveways, paving etc, and wants to start his own company, but we aren't entirely sure how to do all the legal paperwork stuff involved in setting up a company/companies house etc. Is an accountant needed? Or is it all quite simple?

Badbadbunny Fri 07-Oct-16 08:04:09

Accountants aren't "needed" in the same way that you don't "need" a garage to service your car or "need" a plumber to change a tap or "need" a gardener or cleaner or decorator.

If you want to do it yourself, you can, BUT you need to spend some time in doing the research to get it right. You need to understand the difference in roles and responsibilities and rights between directors and shareholders as deciding those roles and percentage splits, share capital, etc is all part of the formation process. It's very easy to get the set up wrong and then it takes more time (or costs money to get an accountant to help) to put it right.

Beyond the formation, you'd need to research how to do the book-keeping, how to prepare and submit payroll, maybe VAT returns, understand preparation of company accounts in the format prescribed by law, understand corporation tax returns, understand the optimum tax situation of paying yourself the right mix of salary and dividends, understanding what expenses can be claimed through the company etc. None of this is rocket science, but it does take time to research properly and if you get things wrong it can cost you a lot of money in overpaid tax or worse case, fines and penalties for getting the submissions late or wrong.

Most people with no experience would use an accountant. It's false economy to try to start off on your own with the intention of using an accountant a year later for the tax returns. Far better to get the accountant from the beginning so that you get it set up properly and don't lose out on any tax saving opportunities.

Kr1stina Fri 07-Oct-16 08:17:59

Why does he want that to set up a limited compmay ? He could work as a sole trader

Before he does this he needs to work out all the extra things he will have to do as a sole trader , they work out how much it will cost in time and money.

It's a bit like teenagers who resent having to pay mum £200 / month digs money and decide to move into a flat because it's cheaper. Aftre all , they don't eat £200 of food. Then they discover that they have to pay all these hidden costs - TV license, council tax, contents insurance , Sky box, , utility bills . All these " little " things that ass up to a lot.

Your Dhneeds to factor in no paid holidays - many companies give at least 6 weeks inc PH. No sick pay .

No overtime or weeken pay .

You need to pay for materials up front , as he will ony get a cash account. Some customers won't pay or will pay very slowly .

Running costs of a van, tools, PPE. Insurances . Advertising and marketing .
He need to pay staff even if the customer doesn't pay him .

He needs to do bookkeeping or pay someone else to do it .

He needs to go around and price jobs , spent time being nice to prospective custoners. You don't get paid for any of this .

WitteryTwittery Fri 07-Oct-16 22:52:26

Thanks, that's all really helpful stuff to start with. We will definitely get an accountant to set it all up then. Can any accountant do it, or is it a specialist thing?

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