Bury Accountants

Although hiring an accountant is not legally required when operating as a sole trader there are various benefits to doing so.

Do I legally need an accountant?
Despite common assumption, small businesses are not required by law to engage an accountant, and organisations that meet the following criteria are exempt from auditing:

1. The business must be “small,” as defined by two of the following criteria: turnover of less than £6.5 million, average employee count of less than 50, and balance sheet turnover of less than £3.26 million.

2. If a firm member seeks an audit (assuming they hold 10 percent of the share capital or 10 percent of all members for a company limited by guarantee).

The majority of businesses meet this criterion.

Why would you engage an accountant?

Despite the fact that hiring accountants is not needed, the vast majority of sole traders do so for a variety of reasons.

Simply put, an accountant does more than put your books together at the end of the year and file your VAT filings. They also do a range of other things, like:

• Getting the company registered with the necessary tax departments, such as VAT  and PAYE.
• Establishing and maintaining the company payroll, as well as complying with the new RTI standards.
• Bookkeeping.
• Organising business correspondence (HMRC).
• Providing tax planning guidance.
• Professional references are available upon request.
• In addition, experienced accountants are more aware with the nuances of dealing with tax authorities, the right format for submitting information to HMRC, and are usually better prepared to deal with tax enquiries if they arise.

Additional Points to Consider
If you decide to go it alone, you must ensure that your accounts are kept in accordance with Generally Accepted Accounting Practices, that information is submitted on time and accurately (and in the correct format), and that the company’s statutory and financial obligations are met.

Compare the time you’ll spend preparing your accounts, bookkeeping, and dealing with HMRC to the expense of hiring an accountant for a small business or freelancer.

If saving money is your top priority, an accountant may be able to help you save both time and money by allowing you to focus on running your business rather than worrying about numbers.

As a sole trader, you must calculate the amount of tax you owe each year. This will be considerably easier if you have a clear picture of your income and expenses. Because you won’t have your tax withdrawn on a regular basis through a PAYE system, maintaining track of your accounts prevents you from accidentally depleting the funds you’ll need to pay HMRC on January 31.

When you’re a sole trader, it’s often beneficial to keep track of how much you spend and generate. With everything laid out, you can spot possibilities to boost your profit margin, such as switching suppliers or raising the price of particular products or services.

By law, you must keep track of your income and expenses and keep them for five years after the 31st of January tax filing deadline. If HMRC requests these, it’s critical that you have them ready. Here is a list of all the documents you should keep:

• As a sole trader, your business revenue includes all you earn from your services and sales.
• Personal income – Any income you receive from other sources, such as property and investments, that may have an impact on the amount of tax you owe.
• Expenditure – Payments for items required to run your firm efficiently.
• VAT records – If your annual turnover exceeds the VAT threshold, you must register for VAT and keep records for a minimum of six years.
• PAYE (Pay As You Earn) records – You can hire workers as a sole trader without creating a limited company, but you’ll need to keep track of your salaries via HMRC’s PAYE system.
• Grants – Any funds you receive as a result of a grant.

• Small limited company accountants
• Sole trader online accountants
• Online partnership accountants
• Limited liability partnerships accountants
• Contractor accountants.