Accounting is something that many small businesses and contractors are put off by, but money and cash flow are vital to both the business and you personally. Although contractor accountants can help with virtually any financial aspect of running a small business, it is in dealing with taxes and ensuring that you legally reduce your tax liability that they tend to provide the greatest returns. We all need to ensure that we pay the right amount of tax, but paying too much can prove costly, and it is something that can be avoided through the use of an efficient and knowledgeable contractor accountant.
A contractor’s time is limited, and is best spent vying for contracts and completing work. What might take a professional accountant a couple of hours over the space a month is likely to take somebody inexperienced much longer. You will need to research tax laws, ensure that you are up to date on the latest regulatory changes, and then dedicate time to managing your income and expenditure, and ensuring that your accounts are up to date.
A contractor accountant has knowledge of all the latest changes, and they have the software, the tools, and the expertise to ensure that your accounts are always up to date.
Paying Too Much Tax
This knowledge of tax law also means that a contractor accountant is best placed to be able to legally minimise your tax liability. Effective accounting means that your accountant will identify potential tax saving opportunities throughout the year, rather than taking a retrospective look at the end of the financial year, when it is often too late to make any changes. Your accountant will be able to advise on whether you should remain as a freelancer or establish a limited company, and they will be able to provide you with advice on the best way to take money from your company.
Save Fines And Penalties
As well as ensuring that you pay the right amount of tax, you need to submit the appropriate forms within given deadlines, determine which types of tax you are liable for, and making payments in a timely manner. Failing to meet the numerous deadlines that exist means that you could be fined hundreds of pounds for filing a single form, one day late. This can quickly increase to thousands of pounds if you pay a bill several months late. Your accountant will not only remind you of when you need to make payments, but will work out an effective budgeting plan to ensure that you have the money available when required.
The government’s own guide to self-assessment, expenses, and tax for contractors is over 100 pages long. Even for the most diligent self accountant, it is all too easy to make mistakes, especially when you consider that tax laws and accounting laws can change at any time. Using a professional contractor accountant means that you won’t make mistakes, won’t receive penalties and fines, and you won’t fall behind with the necessary paperwork or payments.
Concentrate On Running Your Business
Arguably the biggest benefit of using a contractor accountant is that it allows you to concentrate on running your business, without having to worry about tax and accounting matters. You save the time it would take to research tax laws, to set up accounting software, and to manage and maintain a monthly account and budget. Not only does this mean that you save time, but it means that you can spend that time winning contracts, taking on new projects, and earning more money.