Anyone do their own company accounts?
Discussion
EVERYBODY says to me "but my affairs are simple".
That's not the point. The underlying rules and regulations, as well as the tax, is usually quite complex. So even if the basic accounting is not that hard, turning the figures into something that is PROPERLY compliant with the regulations is quite a bit harder.
That's not the point. The underlying rules and regulations, as well as the tax, is usually quite complex. So even if the basic accounting is not that hard, turning the figures into something that is PROPERLY compliant with the regulations is quite a bit harder.
red_slr said:
I would never even attempt to do my own.
We do our own VAT, PAYE and payroll but that's about as far as it goes.
Mrs SLR puts everything on Sage, but at the end of the year he just gets 3 or 4 boxes of paperwork and a USB stick and we leave him to sort it.
Pretty much this for me - small ltd company, I'm pretty hands on with it and do my own book keeping, VAT returns, and PAYE. Accountant comes in once a year and prepares the annual accounts and corp tax, based on my spreadsheets, bank statements and in/out invoices. Mine's about as simple as a ltd co could be, but no way would I try to prepare my own EOY accounts. I pay him well under £1000 for that. I like to think my record/book keeping is pretty good, which must make his job easier, so I guess that helps keep his costs down.We do our own VAT, PAYE and payroll but that's about as far as it goes.
Mrs SLR puts everything on Sage, but at the end of the year he just gets 3 or 4 boxes of paperwork and a USB stick and we leave him to sort it.
I also run a very small business as a sole trader (T/O less than 3k). I do my own SA tax return based on my own book keeping for that. It might be possible for an accountant to shave a bit off the tax bill for that, but it would probably cost more for an accountant to look at it than the tax bill it generates anyway.
Eric Mc said:
EVERYBODY says to me "but my affairs are simple".
That's not the point. The underlying rules and regulations, as well as the tax, is usually quite complex. So even if the basic accounting is not that hard, turning the figures into something that is PROPERLY compliant with the regulations is quite a bit harder.
Absolutely. I met my accountant in the early days of trading & have been a client for over 20 years. He's proved his worth many, many times over.That's not the point. The underlying rules and regulations, as well as the tax, is usually quite complex. So even if the basic accounting is not that hard, turning the figures into something that is PROPERLY compliant with the regulations is quite a bit harder.
For me at least this would be a massive false economy - my business isn't accountancy so getting the guys who I have been with for 20 years to do everything is not even worth thinking about. I think they cost me about £2k a year (they used to charge a flat rate per month but now charge for time as things have got more complicated) but they have saved me huge amounts more than that over the years. I'm quite friendly with the owner and maybe twice a year we have lunch, it's during these informal chats that they really understand my business and can then ensure the rules are applied properly - a good example is my accountant asked me (over lunch) what happens with staff when we are between projects. When I told him they were able to apply a certain percentage of the staff costs as R&D which I understand saves me some company tax.
I think it is one area you need to be absolutely cast iron on if you aren't to get bitten. I'm more than happy to pay for that.
I think it is one area you need to be absolutely cast iron on if you aren't to get bitten. I'm more than happy to pay for that.
Exactly.
If you have a good double entry book-keeping package in place and are diligent and accurate in making the day to day entries - and you monitor basic things like bank balances, creditors' and debtors' accounts etc, then there is a good chance that the information you give to your accountant at the end of the year is in pretty good shape.
This will enable him/her to carry out the necessary tidying up and compliance work that needs to be done to make sure that the final figures are in line with all the official requirements. Most day to day book keeping and accounting packages will not take the figures to this compliance level.
In addition, if the accountant is half way decent, they will also advise on any additional transactions that would be useful for the company to include in the final figures in order to optimise or avoid a potentially painful tax situation.
Finally, we are living in a very fast moving world regarding changes to regulations. They often occur almost on a daily basis. A lot of these changes need to be reflected in accounts and related tax work. It is unlikely that a non-accountant or tax adviser will be up to speed on these changes. There are just too many to cope with. I sometimes struggle myself and it is what I do.
Just to demonstrate how mad the situation can be, in the 12 month period from March 2015 to March 2016, we had, effectively, four Budgets.
This year has been almost as bad with the normal two Budgets (Budget in March and Autumn Statement a few weeks ago) plus lots of changes on the way affecting the presentations and disclosures required for ALL limited companies.
And looming on the very near horizon is the dreaded Making Tax Digital.
If you have a good double entry book-keeping package in place and are diligent and accurate in making the day to day entries - and you monitor basic things like bank balances, creditors' and debtors' accounts etc, then there is a good chance that the information you give to your accountant at the end of the year is in pretty good shape.
This will enable him/her to carry out the necessary tidying up and compliance work that needs to be done to make sure that the final figures are in line with all the official requirements. Most day to day book keeping and accounting packages will not take the figures to this compliance level.
In addition, if the accountant is half way decent, they will also advise on any additional transactions that would be useful for the company to include in the final figures in order to optimise or avoid a potentially painful tax situation.
Finally, we are living in a very fast moving world regarding changes to regulations. They often occur almost on a daily basis. A lot of these changes need to be reflected in accounts and related tax work. It is unlikely that a non-accountant or tax adviser will be up to speed on these changes. There are just too many to cope with. I sometimes struggle myself and it is what I do.
Just to demonstrate how mad the situation can be, in the 12 month period from March 2015 to March 2016, we had, effectively, four Budgets.
This year has been almost as bad with the normal two Budgets (Budget in March and Autumn Statement a few weeks ago) plus lots of changes on the way affecting the presentations and disclosures required for ALL limited companies.
And looming on the very near horizon is the dreaded Making Tax Digital.
While the new accounting "framework" has been known about for a few years now, the software companies that provide packages to prepare year end accounts have been slow in getting their act together. There are still multiple options available for small companies in the rules to follow for preparing their accounts, and there have been in some cases significant changes in way you account for income and expenditure and assets and liabilities, not to mention presentation and what you have to say in the notes. The rules and guidance can be complex and unclear which leads to subjectivity. It is a big learning process for the UK accounting profession.
I am involved in accounts preparation most days, and while I would happily prepare my own annual accounts if I had any, the issue for me would be, as Eric notes, the tie in with tax submissions which have to be in digital format and require conversion of the accounting information. We have specialist software to do that in the office, but I am not aware if HMRC still provide their own version free.
I am involved in accounts preparation most days, and while I would happily prepare my own annual accounts if I had any, the issue for me would be, as Eric notes, the tie in with tax submissions which have to be in digital format and require conversion of the accounting information. We have specialist software to do that in the office, but I am not aware if HMRC still provide their own version free.
s2kjock said:
While the new accounting "framework" has been known about for a few years now, the software companies that provide packages to prepare year end accounts have been slow in getting their act together. There are still multiple options available for small companies in the rules to follow for preparing their accounts, and there have been in some cases significant changes in way you account for income and expenditure and assets and liabilities, not to mention presentation and what you have to say in the notes. The rules and guidance can be complex and unclear which leads to subjectivity. It is a big learning process for the UK accounting profession.
I am involved in accounts preparation most days, and while I would happily prepare my own annual accounts if I had any, the issue for me would be, as Eric notes, the tie in with tax submissions which have to be in digital format and require conversion of the accounting information. We have specialist software to do that in the office, but I am not aware if HMRC still provide their own version free.
What's scary is that this digital compulsion is coming soon to non company accounts too.I am involved in accounts preparation most days, and while I would happily prepare my own annual accounts if I had any, the issue for me would be, as Eric notes, the tie in with tax submissions which have to be in digital format and require conversion of the accounting information. We have specialist software to do that in the office, but I am not aware if HMRC still provide their own version free.
My business is reasonably straight-forward. I do all the record-keeping and the VAT and let the accountant I've been with since the start do my PAYE, self-assessment and EOY stuff. For that it costs me less than £1000 per year.
I have a bit of fun by keeping track of what I think my corporation tax liability is going to be during the year. By the time I've handed over all my figures for the accountant to make sense of, he's never once in about 15 years of trading managed to get the actual liability down to more than what he's charging me for his services less than my figure. That and the peace of mind from knowing it's all done properly makes it more than worth it.
I have a bit of fun by keeping track of what I think my corporation tax liability is going to be during the year. By the time I've handed over all my figures for the accountant to make sense of, he's never once in about 15 years of trading managed to get the actual liability down to more than what he's charging me for his services less than my figure. That and the peace of mind from knowing it's all done properly makes it more than worth it.
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