New business - accountancy fees(6 Posts)
I'm just starting to work for myself as a consultant to a larger business. I have 3 months work contracted initially but likely to extend beyond that. My gross earnings for the 12 week period will be circa £12k.
I have been asked to set myself up as a Limited Company rather than a sole trader and I'm thinking I will need help setting up the company then managing the tax / VAT etc to ensure I'm compliant. I don't want to risk doing it all myself and getting something wrong and being fined.
Can anyone advise me on what I should be expecting to pay for an accountant to manage this for me? I've put out some feelers but have no idea what to expect and don't want to look like a total idiot when I meet them.
Also, would the 12 week period be an issue? While I'm hopeful and optimistic that it will extend beyond that period, there are obviously no guarantees so I don't want to be tied into paying for an accountant if my earnings are zero.
Can anyone advise - thank you in advance. I'm in the north/west if that has any bearings on things.
Who has asked you to set up as a limited company? I wouldn't have thought it would make any difference to the employer.
I was recently told it's about £100 a month for the accountant, by a friend who has done similar.
Thankyou for the info.
It is the company that I have agreed to do consultancy for who have asked me to set up as a LTD company.
You probably won't need to register for VAT, not unless you turnover for the year is likely to be over the threshold (2014/15 was £81,000).
If you are only going to work for this consultancy they have probably asked you to set up a limited company in order to protect themselves, as otherwise you might be deemed to be an employee.
You're right to be thinking about getting an accountant. It's really not advisable for someone with no prior experience of businesses, accounts, tax returns etc., and yes, the fines for late submission can be high, not to mention the lost opportunity cost of getting things wrong and paying more tax than you need to because of poor tax planning.
You may not "need" to be VAT registered, but voluntary VAT registration is often beneficial and the benefits may well be high enough to pay the accountant on it's own if a special VAT scheme is adopted.
Likewise, get your payroll set to the right amount and get the timings of payment of wages and dividends right, and again you could save some tax/nic, again, maybe of a high enough amount to pay the accountant fees.
Plenty of qualified accountants that will help you set up the company, register for taxes, deal with the VAT, help with book-keeping, deal with payroll submissions, and year end, for around £1,000 mark per year. Just make sure you choose one that knows about IR35 and personal service companies - shockingly, many accountants aren't up to speed re personal service companies and you also have to be wary of unqualified accountants as it's not a regulated profession like architects or solicitors so anyone can call themselves an accountant even if they've no qualifications, no insurance, not even any experience!
The short period isn't a problem of itself, but you'll still be paying for virtually a full year anyway as the time taken to do a year end set of accounts and tax returns is pretty much the same as for a shorter period, not to mention the time to set up and register and then for de-registering and closing down.
Thanks so much, that's useful guidance.
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