There is no legal requirement for most businesses to have an accountant. The exceptions are those that are required by law to have what is known as an audit. The requirement for an audit is for businesses with a turnover in excess of £10.2m or assets of £5.1m.
So why should I have an accountant, how do they add value?
- Your business structure – by evaluating the pros and cons of whether you set up as either a Sole trader, a Partnership or a Limited Company. This will include considering tax savings and non-financial issues.
- VAT schemes – by considering which registration option is suitable for you, including special schemes that may mean voluntary registration saves you money!
- Increasing Profitability – by suggesting improvements and ideas to help increase your profitability and ways to reduce costs.
- Avoiding deadlines and penalties – by ensuring you never miss a deadline.
- Minimising your tax – by making sure you are always receiving the most up to date advice.
- Bookkeeping training – If you decide to maintain your financial records yourself, an accountant can train you to do this in the most efficient way, saving you time and money.
Most businesses benefit from the advice, experience and wisdom of having an accountant to look after their financial affairs. Not least if it is simply to ensure they operate legally and to help minimise any tax liabilities they may have. Certainly having an accountant with whom you have a good working relationship will help in the success of your business.
When people refer to an “accountant”, they generally mean a Chartered Accountant, operating in practice and looking after peoples’ businesses. However, the term is not protected so anyone can set themselves up as an accountant without being qualified and this is where the difficulties lie.
As the individual doesn’t need to be qualified they can undercut the qualified accountant who has to be regulated by a professional body, undertake many hours of obligatory training, and carry expensive professional insurance which the non-qualified does not. The former may need to charge more but in the long run the tax savings you will enjoy should outweigh any difference in price. If you want to tell if someone is a qualified chartered accountant, just look for the ACCA or ICAEW logo on their website.