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Accountants Can Reduce Your Tax Liability

In the case of a freelancer, contractor freelancer or small-scale company understanding the details of tax-related issues for your business is likely not the first thing you’re thinking about. This article explains why hiring an accountant is a good business sense.

If you are establishing yourself for the first time as a freelancer or even as a small company one of the most important obligations you must face up to is tax obligations. Alongside a suitable insurance policy for freelancers You may discover that accountants play an important part to play in the success of your company.

When you’re working for yourself, each penny is important, from the cash arriving, to the money that goes out. Making sure you keep track of everything is a task that isn’t a whole lot, but it’s easy for people to view accountants as just another expense. There are plenty of reasons to spend that more to have an experienced accountant could aid in the growth of your business. Here are the top five advantages that an accountant can provide to your company.

1. It could save you time.

If you decide to work on your own, be it as a contractor limited company owner, consultant or freelancer the goal is to create revenue and to fulfill the task you’ve won.

The process of completing the paperwork, and keeping track of the amount you’ve spent and the new information that is arriving can take a lot of time and could take away time from the work at your hands.

A professional accountant who is knowledgeable of the most recent tax laws, rules , deadlines, and one who fully comprehends the formats HM Revenue and Customs requires for all of the data, can make it easier to save hours of searching through the HMRC website, allowing you free to utilize your time more effectively.

2. Reduce your tax obligation

A competent accountant will know how to help you save money as well as provide you with sound advice regarding the most tax efficient method of managing your company.

The best method to run your business whether self-employed or as an LLC (external link) and the most tax-efficient method to withdraw money of your business is something they will advise you through depending on your personal circumstance and circumstances.

You will be able to pay dividends and understanding the limitations on what you are able to and cannot be claiming through company expenses and the advantages of the VAT scheme with a flat rate.

A flat-rate VAT program (FRS) is an incentive provided by the government that allows customers to add VAT to their invoices for the regular rate (20 percent in 2014) however pay HMRC back with less of. For instance, if, for example, you’re an IT consultant with little VAT-related expenses, you’d only have to pay 14.5 percent to HMRC using an annual basis under the VAT flat rate scheme, and keep the remainder as profit.

An experienced cheap accountant can provide you with the most accurate advice about whether the FRS is suitable and will financially improve your business.

3. Avoid paying penalty and tax fines

One of the main aspects of managing your financial matters and working for yourself is staying on top of your paperwork and avoiding any penalties due to late payment. For certain people, this is an essential part of the work they enjoy and are content to stay current with. For those who don’t, an accountant is beneficial so they don’t have to fret about the looming deadlines, stay up to date with current legislation , and also ensure that they won’t fail to meet an important tax deadline.

Staying on top of your tax returns, whether assisted by the accountant you use or not can ensure that your cash balance healthy by avoiding fines that can be anywhere from PS150 for one day of late in submitting annual accounts, to a staggering PS1,500 fine for a delay of six months.

This is only the penalty for late when you submit your annual financial statements This doesn’t count the penalties for being lateor have submitted your forms in error for self-assessment tax returns tax return, VAT return, and corporate tax. Your accountant will be on top of deadlines so that you don’t need to.

If you are currently an independent contractor, or are thinking of being a contractor, or have an organization that employs contractors, you must be aware of numerous tax implications you should be aware with. Self-employed contractors who work through a limited company may gain tax advantages however, you must be in compliance with the rules of IR35 to legally gain these benefits.

4. Let us help you expand your company

An accountant who is knowledgeable will provide you with knowledge and guidance in helping you increase and expand your company.

Typically , clients are assigned their own accountant which means that from the first day you’ll be working alongside an accountant that is familiar with the specifics of your business . They will have a great deal of pride in seeing your business grow.

5. Remove your tax worries

Taxes are a bit complicated. The HMRC guide to expenses has more than 100 pages So it’s not a surprise that many small-scale business owners are concerned about their tax obligations.

You must remember to make your year-end company accounts as well as prepare abbreviated company accounts when appropriate, prepare taxes for yourself, create corporate tax computations and returns as well as VAT calculation submissions. communicate with HM Revenue and Customs, handle Companies House and sort your payroll can be a hassle that is easily avoided with the help of a professional accountant.

Your accountant will make all the paperwork that you need, thereby saving money , and giving you peace of mind while helping you get on managing your business.