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How to choose the right contractor accountant

When you work as a contractor, choosing the right accountant is essential. Failure to do so can cost you a lot of money and easily get you into trouble with the tax authorities.

Fortunately, working out whether you have found the right accountant is not as complicated as it seems. You just need to follow the advice below:

Check they are a specialist accountant

First, you need to accept nothing less than a specialist. Contractor tax affairs are complex. They are governed by additional laws, so you really do need to find someone that is familiar with and understands them.

A good grasp of the IR35 regulations

The IR35 regulations are one example of this. You need to ask anyone you are planning to hire a few pertinent questions about this regulation. Doing so will soon uncover someone who has just added contractor accounts to their list of services.

For example, if they do not understand how to use contractor pensions to mitigate some of the IR35-related taxes, you should be suspicious. A proper contractor accountant will have a good grasp of this subject.

Familiarity with the Managed Services Company (MSC) legislation

By law, contractors are responsible for carrying out certain tasks themselves. Your accountancy firm should be aware of this and be able to advise you on how to stay within the rules.

A clear pricing structure

Regardless of what type of services they are providing, a trustworthy accountant will be very clear about their prices. They will not just give you a ballpark figure. When you ask them for a quote, everything that is included in the deal should be listed. They should also be more than happy to clarify anything you do not understand.

Understand the services you can expect to be included

When looking at the quote, ensure that all of the services you need are actually included in the price. You will definitely need your annual accounts and tax returns to be done. Plus, if your turnover meets the VAT registration threshold, you will also need to have your VAT return done. You may also have to fill out a P11D form and, at some point, may need a reference; for example, if you want to apply for a mortgage.

Manage your accountant

You also have to think about the working relationship you are going to have with your accountant. They are advisors and you are contracting them to carry out specific tasks for you.

Ultimately though, making sure things are done on time is your responsibility. If a tax return gets filed late, HMRC will see that as your error, not your accountant’s, so you need to have a good working relationship with them.

If you cannot communicate with each other, something is likely to go wrong. You need someone you trust and who will update you when key tasks have been done.

As you can see, finding a good contractor accountant is mostly common sense. All you need to do is to set enough time to carry out your search for one properly.

Posted by Mark
October 2, 2018

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