By nature, business owners are busy. That implies they spend the bulk of their time running their company, caring for their employees, and forgetting to maintain books. It’s not a punishable offence — but it might lead to difficulties with HMRC in the future.

Fortunately, accountants can provide assistance. The term accountant, on the other hand, is sometimes sadly associated with the term “cost.”

In this article, we’ll attempt to break down some of the factors and show you exactly how much an accountant costs for a limited business. We’ll also address some typical concerns about accounting fees since we understand that picking your accountant is a big decision with significant implications.

In the United Kingdom, how much do accountants charge for limited companies?

The answer to this question is frequently requested, and it is almost always given with an unsatisfactory response, since the answer is: it varies.

Accounting fees vary depending on the services you want from your accountant (more on those below), as well as factors that impact your company, like annual turnover and VAT registration.

If you’re only looking for an accountant to prepare basic annual business reports, the usual fee ranges from £750 per year.

Do You Have To Pay An Accountant For A Limited Company?

This is a simpler issue to address. There is no legal obligation in the United Kingdom demanding that a small company hire an accountant at this time. Some small business owners can do their annual accounting and bookkeeping on their own in the early days of their new enterprise using accounting software.

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However: it is advised.

Accountants can assist business owners with a wide range of accounting activities, reducing the burden on them and freeing up time for more important things. We’ve compiled a list of their specialised services below.

Exactly What Services Are Included In Accountancy Fees?

Accounting firms can assist limited company directors with a variety of financial and legal needs in their fixed monthly cost.

The following are some of the services that a competent accountant might perform for a small company:

1. Completing self assessment tax returns

Directors of a limited company must submit an annual Self Assessment Tax Return to HMRC. A self-assessment tax return records the personal income and benefits of a company’s owner.

The deadline to submit a self assessment tax return is January 31, following the filing of your company’s financial results. It may be difficult for new business owners. Accountants can assist with the lingo and tax savings while also keeping a company owner in line with tax avoidance rules.

2. Completing VAT returns

VAT (value-added tax) is a three-letter term that instils fear in even the most hardened business owner. VAT is notorious for being complicated and changing frequently.

Accountants for limited companies come in useful here, since they can help with quarterly VAT reports, establishing a fair payment mechanism so that firms don’t have to pay too much, and offering sound guidance on how to decrease their VAT expense while following the most up-to-date tax laws.

3. Paying Corporation Tax

HMRC will also request a corporate tax return at the close of each financial year, as well as filing a self-assessment tax return and annual company reports.

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The objective of a corporation tax return is to report taxable profit made by a limited company, even if the business has lost money or does not meet the threshold for payment.

As with the aforementioned VAT return, a corporation tax return is just as difficult to understand because it also needs a profit/loss statement. Only, instead of being based on the company’s financial statements for the previous year, it will be based on those prepared under UK law. Specific tax rules are adjusted in these calculations to include tax-only add backs and deductions.

Because this paperwork may seem overwhelming, an accountant may assist the company owner in preparing and predicting how much corporation tax the limited company will owe.

4. Assisting with payroll services

Large businesses often handle payroll internally, but for smaller organisations, outsourcing it to an accountant is frequently helpful.

Why? Because payroll is time-consuming. Creating the right amount of money in the company bank account is the first step, followed by income tax and HMRC paperwork.

The time to prepare your taxes is one of the most stressful parts of running a business, and an accountant may be able to assist in this regard. They’ll make sure payroll is submitted on time, income tax returns are submitted, and that a firm stays on the correct side of essential payroll rules and legislation to avoid paying fees.

5. Registering tax and other legal financial requirements with HMRC and Companies House

An accountant may save time and confusion in the early days of a new business by registering the company with Companies House and HMRC.

In those early days, an accountant might assist with things like tax planning, payroll processing, and National Insurance contributions, as well as examining if the company should be VAT registered.

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For a new company director, this sort of assistance, tax efficiency, and strategic guidance may be critical in the early days of establishing a business.

6. Bookkeeping

Small businesses rely on bookkeeping to keep track of their finances. Bookkeeping is a time-consuming, tedious, but crucial function for small companies. Nobody wants to go through their records at the end of the year (or if HMRC springs a surprise and knocks on your door).

Fortunately, accountants are detail-oriented and capable of properly managing your bookkeeping, allowing you to devote more attention to other business critical issues.

Can I Do My Accounting Without An Accountant?

You may, but there are a few things to consider.

To begin, you’ll need dependable accounting software. Accounting software enables you to keep track of your accounts in an organised way while saving time and effort.

You’ll also need to make sure you know the fundamentals of accounting. Remember that you’ll have to submit a self-assessment tax return, a business tax return, vat returns, and possibly other reports. To stay ahead of the curve, you’ll also need to set up payroll.

Finally, you’ll need to keep up with deadlines. A tax return that is late or incorrect may lead to a slew of issues. Keep in mind to double-check your accounts after you’ve gotten the hang of bookkeeping and how to use your accounting software.

To sum up, the cost of an accountant for a small firm may differ based on the scale and intricacy of your company. Hiring an accountant, however, will not only save you time in the long run by keeping track of all expenditures and investments, but it will also save you money over time by ensuring that you submit accurate paperwork to HMRC or Companies House.

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