I’ve blogged previously about why you should have an accountant. However, when trying to cut costs (and who isn’t, these days?), often business owners look to cutting accountant fees. They either fnd a cheaper accountant, or they do without one altogether.
Unless you require an audit, there is absolutely no obligation for a business to appoint an accountant. None whatsoever. It is only a matter of being prepared to spend time researching how to do it (and then doing it, obviously):
- Making sure every transaction is in the right place
- Dealing with tricky, unusual or ambiguous transactions
- Using the required format (particularly important for limited companies/limited liability partnerships)
- Having the correct notes & wording (again, mainly for limited companies/limited liability partnerships)
- Decide what is tax-deductible and what is not
- Getting the tax computations correct and in the right format.
The information required to prepare a set of accounts and a tax return is all within the public domain. Sole traders should look mainly at the HMRC website. Limited Companies should also refer to the Companies House.
With the advent of iXBRL (a new labour-saving – for HMRC, that is – way of “tagging” accounts and tax returns so that computers can “read” the data), you must file or submit your accounts & tax online.
The software to do all this is also available free from HMRC. Just set up a login and wait for the PIN to arrive in the post (this can take a little time, so plan ahead). (Limited companies can “joint-file” to HMRC and to Companies House using this software. Alternatively, Companies House have their own free software that you can use to file accounts directly with them)
The only questions to consider are:
- Have you got time for all of this?
- Do you even want to do accounts?
- Will it be correct? (there are penalties for getting it wrong and/or late – and ignorance is no defence or excuse)
- Will you have paid more tax by doing it yourself?
- Could you be doing something more productive and profitable with your time that would have earnt you more money than the accountant fees would be?