Do I Need An Accountant If I’m Self-Employed?

Starting out as a freelancer or contractor can be quite daunting, and there are many different things to consider, including whether or not to engage an accountant to take care of your tax responsibilities. As you’ll no doubt already know, there are plenty of pros and cons to outsourcing things, but the question is, should your tax and finances be one of them?

Let’s take a look.

Sole trader vs limited company

If you operate as a sole trader, you’re under no legal obligation to engage an accountant. If your business is relatively straight-forward and you keep on top of your invoicing, your receipts and have a good idea of the expenses you can claim, then you may feel like you don’t need one.

The tax responsibilities for contractors, however, aren’t quite as simple. As a result, and although it’s not mandatory, many contractors working through their own limited company choose to outsource this aspect of business ownership to a trusted accountant.

Why engage a contractor accountant?

Contractors enjoy many advantages when outsourcing their tax management to an accountant. Here are a few you should be aware of.

Qualified experts

At the best of times, tax is complicated, whether we’re talking about VAT, Income Tax, IR35 or Corporation Tax. To help ensure your compliance, you need to have an in-depth understanding of complex tax legislation and keep on top of any reforms that are being rolled out. It goes without saying that this becomes quite time-consuming.

Specialist contractor accountants are experts in their field and can not only guide you on many areas of tax, but also offer you peace of mind when it comes to filing for your tax returns. In other words, they will keep their ear to the ground, should know the rules inside out and are able to take care of everything on your behalf.

Time saving

The time saved by bringing on an accountant is likely to be cost-effective. It will free you up so that you can focus on your work – work that you are paid for and will cover the cost of your accountancy fees. Put simply, engaging a contractor accountant allows you to spend more time doing what you do best – whether that’s coding, developing, marketing or engineering.

Financial planning

If you want to grow your business, make investments, buy a house or start putting money aside into a pension, an accountant will provide trusted advice and guidance from both a personal and business perspective. They can offer you ways to save money, will put you in touch with mortgage experts and help you with other aspects of wealth management.

How to find the right accountant

Let’s imagine for a moment that you’ve done your research and are ready to hand things over to a contractor accountant. With so many firms and independent consultants out there now, how do you differentiate them and make the right choice for your business?

First, ensure the individual or firm you are hiring are chartered accountants. Hiring a registered accountant will minimise the risk of a mistake on your tax returns (and mistakes can happen), which could cost you a lot of money, not to mention stress. Consider engaging a specialist accountant, such as QAccounting. With a firm understanding of the contracting landscape, a genuine specialist will be able to provide expert advice and is likely to be well-versed in specific tax legislations that apply to your business, like IR35.

Do your homework and explore the additional services accountancies offer. For example, do they provide products, such as insurance, that can protect you in the event of an investigation from HMRC?

QAccounting provides a range of solutions and accountancy packages for contractors – from setting up your business bank account, bookkeeping, year-end services, VAT returns and even IR35 contract assessments.

So do you need an accountant? The choice is yours, but engaging the right one may be just what you need to save time, ensure your tax compliance and arm you with the tools needed to become a successful contractor. As one of the leading contractor accountants in the UK, we have been supporting contractors for over 20 years. Our range of contractor accountancy packages start from just £95 per month + VAT. To learn more, please request a callback and one of the team will be in touch.