Accountants are responsible for auditing accounts, providing financial advice and managing accounting processes. They can also prepare tax returns and conduct cost-benefit and risk analyses. They generally specialise in a certain area – for example, some accountants specialise in personal tax, small business finance or non-profits.
It’s important to find an accountant who specialises in your circumstances, whether it’s for filing your Self Assessment tax return or for helping move your business forward.
The Financial Reporting Council (FRC) regulates accountants, along with auditors and actuaries. It sets the UK’s Corporate Governance and Stewardship Codes and is sponsored by the Department for Business and Trade.
However, there are also 6 chartered accountancy bodies; accountants must be a member of one. These bodies are regulated by the FRC:
Association of Chartered Certified Accountants (ACCA)
Chartered Institute of Management Accountants (CIMA)
Chartered Institute of Public Finance and Accountancy (CIPFA)
Institute of Chartered Accountants in England and Wales (ICAEW)
Chartered Accountants Ireland (CAI)
Institute of Chartered Accountants of Scotland (ICAS)
Make sure that any accountant you consider working with is a member of one of these bodies.
Accountants charge for services in a number of ways depending on what the task is. For example, for an annual Self Assessment tax return, accountants tend to charge a one-off fee (usually around £150-£250), whereas for things like payroll services they usually charge a monthly fee.
If you’ll need your accountant regularly, it may make sense to pay them annually or monthly on a retained basis. However, if the amount you’ll need them will vary from month to month, it may make more sense to pay them by the hour.
Different accountants will have different ways of charging. Make sure you discuss payment terms with your accountant before you commit to going ahead with them.
Accountants are expensive because they are qualified professionals who have to keep their membership to a regulatory body up to date and continue their development to stay in the know about changes in rules and regulations.
Plus, doing your tax return or helping you with payroll all takes time! If you think your accountant is spending longer than necessary on a task and you pay hourly, ask them how they spent the time and if there is anything you can do to reduce the time they spend – for example, improving your record keeping.
You’ll also pay more for a more experienced accountant, so if you think your accountant is too expensive consider whether you need someone with as much experience. Certified accountants tend to be cheaper than chartered accountants as they have slightly less experience.
It’s also worth remembering that accountants will have their own overheads. If you choose an accountant from a large firm with a large office and more staff, they will charge more to cover these costs. But bear in mind that using a large accountancy firm means that you can draw on many accountants’ expertise in different areas when you need them, so it’s only fair that you’ll pay more.
That being said, if you think your accountant is too expensive and you’ve already had a conversation with them about how you can reduce their fees, consider using a service like HaMuch to find another accountant that fits your budget.
Yes, you can claim tax relief on your accountant’s fees. Accountancy fees can count as allowable business expenses, which will reduce your business’ profit so you pay less tax. However, you can only claim for your accountant’s fees that are wholly related to your business – for example, if you need help with claiming back or repaying child benefit, this has nothing to do with your work so you can’t claim for any fees relating to this. Luckily, your accountant will be able to tell you what you can and can’t claim for!
Tax accountants do exactly what it sounds like – help you with your taxes! They make sure that you are meeting your legal obligations to pay enough tax, National Insurance and any business taxes you may be liable for.
Tax accountants are sometimes called tax advisors. They help you prepare your Self Assessment tax return and can explain tax law to you, as well as help with tax planning to allow you to prepare for the future.
QuickBooks is an accounting software that can manage your invoicing, expenses and many other financial functions. If you use it, you may wonder whether you really need an accountant.
If you’re self-employed and don’t employ any other people, you may not need an accountant if you use QuickBooks. However, it’s still a good idea to use one. When it comes to tax return time, it’s still advisable to have your return checked by an accountant to ensure you’ve filled everything in correctly and you’ve claimed for the right allowable expenses.
If you have a limited company, it’s certainly worth using an accountant to do your tax return as it will be much more complicated and it’s doubtful that you’ll have all the experience and knowledge needed to complete it correctly.
An accountant can give you advice on Capital Gains Tax! Specialist tax accountants are the best people to give you advice on Capital Gains Tax. Put simply, this tax is a charge you must pay when you sell, give away, exchange or otherwise dispose of an asset and make a profit, or ‘gain’. You only pay tax on the gain, not the entire amount of money you receive.
Capital Gains Tax can be very complicated and difficult to understand, so it’s always worth finding an accountant who specialises in these matters to help you make sense of how much, if anything, you have to pay.