What do chartered accountants do?

One of the most useful resources for a business is the services of a chartered accountant. These are highly skilled professionals that can help you manage your business finances.

This article will look at what chartered accountants do and how they can help your company. We’ll cover various topics, including:

• What is a chartered accountant?
• What do chartered accountants do?
• Where can I find a chartered accountant?

There are several steps in becoming a chartered accountant. An individual must:

• Complete a university degree in accounting (or equivalent qualification)
• Have three years of practical experience in accounting
• Complete the Associate Chartered Accountant exam, set by the ICAEW

All this means that chartered accountants are very good at their jobs. Another common feature of a chartered accountant is a specialisation, a subject they have particularly extensive knowledge of. There are hundreds of different specialisations: examples include taxation, corporate finance, audits and insolvency.

If you’re self-employed and your business has earned you over £1,000, you must complete a Self Assessment tax return. This is true for any business owner, regardless of how you registered your business (i.e. as a sole trader or a limited company).

The tax return is how you report all of your untaxed income to HMRC. To fill in the form, you list all of your incoming and outgoing cash, plus your total profit for the year. The government then uses this to calculate the income tax you owe. 

A chartered accountant is great for this task for two reasons: the first is their specialisation and experience. You should be able to find an accountant that specialises in business taxes fairly easily. 

They’ll be able to fill in your self-assessment much faster and more accurately than you would be able to, saving yourself time and effort that you can redirect into other areas of your business.

The second reason a chartered accountant is immensely useful for filling in a tax return is when it comes time to list your business expenses. While filling in your tax form, you can record different purchases you’ve made throughout the year as business expenses. Claiming these business expenses reduces your tax bill by the value of each expense. An expense must be entirely related to the business and listed by the government as tax-deductible in order to claim it. 

A chartered accountant will be very good at finding things to list as business expenses while they look through your company transactions. This is because they’ll have an expert knowledge of what expenses can be legally tax-deductible. By hiring a chartered accountant, you can ensure your tax bill will be as low as possible.

If your business is a limited company, you are legally required to file your company accounts annually alongside your tax return. The accounts are a set of documents that show the company’s performance over the year. They include things like your:

• Balance sheet
• Profit and loss statement
• Director’s and auditor’s report

You’ll send these to a government agency called Companies House, which oversees the creation and taxation of limited companies in the UK. You’ll also send these accounts to HMRC as part of your company tax return. 

An accountant is extremely helpful when filing company accounts due to the number of different documents involved. Chartered accountants regularly specialise in fields like company accounts or corporate finance, so they’re even more useful for putting together your company accounts. 

Since there’s a deadline for filing your company accounts with HMRC and Companies House, you can’t afford to delay if you’re unsure how to create them. Companies commonly keep chartered accountants on retainer for this reason, which means the business will use the same accountant’s service to file their accounts every year.

You can find chartered accountants the same way you might find any consultant or contractor: simply search online and check sites like Linkedin or Yell.com. To confirm their chartered status, though, you’ll need to check with one of the national institutions that give out the chartered status:

• Institute of Chartered Accountants in England & Wales 
• Institute of Chartered Accountants in Scotland 
• Chartered Accountants Ireland (both Northern and Republic of Ireland register)
• Association of Chartered Certified Accountants (UK wide)

While you look for a chartered accountant, one thing to keep in mind is that they are usually more expensive to hire than an uncertified accountant. If you need to hire a professional regularly to sort out your finances, think carefully before you start paying for the services of a chartered accountant. It might not be something your business can afford.

The increased prices are because a chartered accountant has much more knowledge and experience than non-chartered accountants. You’ll almost definitely notice a higher quality in the work they perform to justify the higher price.

Thousands of self-employed people across the UK use the Countingup app to make their accounting tasks easier and save time. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. It makes tracking your business expenses and transactions simple, and allows you to easily share your real-time bookkeeping data with your accountant.

When you hire an accountant, sending them all your relevant financial data can be a hassle. You might find your accountant chasing you up for documents you’ve forgotten to send.

With the Countingup app, you can invite your accountant to gain direct access to your financial data – removing the chance of duplication errors, data lags or inaccuracies.

The two in one app also gives you the ability to invoice on the go, record receipts, and view cash flow insights as well as tax estimates. With Countingup, you can confidently keep on top of your business finances wherever you are. 

Find out more here.