When do you need an accountant for your limited company?

Running a limited company can involve many responsibilities, and some of them might not be things you have the time for, or enjoy learning how to do. 

A common task that the owners of limited companies struggle with is accounting. This article will look at the benefits of hiring a limited company accountant, and where you can go to hire one. The topics we’ll cover include:

• What an accountant can do for your limited company
• Advantages of hiring a limited company accountant
• Where to find limited company accountants
• How Countingup makes working with an accountant easier

If you’re self-employed and have earned over £1,000, you should complete a Self Assessment tax return. This is true for any business owner, whether they’re in charge of a limited company or are operating as a sole trader.

The tax return is how you report all of your untaxed income to HMRC. You need to list all of your incoming and outgoing cash, plus your total profit for the year, and the government will use this to calculate the income tax you owe. 

The section where you fill in your income, outgoing money, and profits is where an accountant comes in handy. These three categories will consist of potentially hundreds of transactions, or even more if your company is quite complex. An accountant will be able to sort through your financial data to help fill in the tax return accurately, where you may struggle if you do it alone.

Limited companies need to file their company accounts as well as their tax return. These are a set of documents that show the company’s performance over the year. They include documents such as 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. This is especially true because there is a deadline for filing your company accounts with HMRC and Companies House, so you can’t afford to delay if you’re unsure how to create them.

The biggest advantage of hiring an accountant is that they’ll sort out your accounting while you work on other tasks. Accounting can be incredibly time-consuming, so getting a professional to handle it for you saves an enormous amount of time. 

Time is one of the most valuable resources of any business owner, so not having to spend tons of time on your taxes or accounts is a huge advantage.

A key part of your tax return is claiming your business expenses. By claiming purchases as expenses related to the running of your business, you can reduce your tax bill by the cost of each expense.

An accountant will usually be able to fill out your self-assessment tax return much more thoroughly than you can. This means they’ll be able to unearth more of your expenses and reduce your tax bill even further.

If you’re trying to put together a plan to grow your business, you’ll need a good understanding of your finances. A good accountant will have a great understanding of business finances, so you can check the quality of your business decisions by running them past your accountant first.

You can find accountants the same way you might find any consultant or contractor: simply search online and check sites like Linkedin or Yell.com. The important thing is to find the right accountant for your business, and there are two factors to consider when doing this.

The first is price. Different accountants have different fees and might charge varying amounts for tasks. For instance, they might charge a certain amount to file your tax return, but another amount to file your limited company accounts. Try to make sure you don’t pay more than you can afford by hiring an overpriced accountant.

The second factor is ability. ‘Accountant’ isn’t a protected title, so anyone can set up a business and offer accounting services. The best and most reliable accountants can apply for chartered status. To find a chartered accountant, try using these online tools:

• 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)

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. It’s a great way to make tracking your business expenses and transactions much easier.

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

With the Countingup app, you can share your accurate, real-time bookkeeping data with your accountant in seconds with the tap of a button. This way, you won’t have to worry about being chased for missing data, duplication errors, data lags or inaccuracies.

As well as accountant access, Countingup also has useful functions like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights. These allow you to confidently keep on top of your business finances wherever you are. 

Find out more here.