Do I need an accountant?

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laurakate

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Didn't want to hijack another thread so here's my question :) ...

Hmm, this is a bit of dilemma for me now because on the one hand I don't want to pay for something that I could easily do myself because I've got a good head on my shoulders but on the other hand I'm anxious that going alone I'll do it wrong (or at least worry about getting it wrong) in a way that defeats the purpose of going self employed to reduce my stress.

A friend of a family members work colleague is an accountant and he's quoted me about the cost of a moderately priced product training course (think lash extensions) to do everything for me...telling me what to write and how to write it and when to tell the tax man what and all of the things I can save money on. Like I was thinking that his help will ensure I get to keep everything I am entitled to as well as save me a lot of time and stress. Do you think this is a good deal? I'd rather not pay that much but I don't want the paper work, as intelligent and capable as I am, to be a source of anxiety either.

I'm going to be a tiny weeny business in terms of the profit I make because I'm doing this as a humble realist who wants to keep my hand in to be honest (and then anything more than that would be amazing but I would see it as a bonus rather than a given).

What would you do?
 

danm

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I know what you mean l felt the same l have now got an accountant so much better its just took the stress from me it's really better you have enough to do with out the added stuff go for it xxxx
 

Leely

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Would the price he has quoted you be for the whole year?

From speaking to my hairdresser who is self employed and mobile she has advised me her accountant only asks for her work diary. She has shown me she writes clients name and treatment then price, then will add in a receipt if she buys anything and highlights the important things like VAT number, company, date, price etc.

I on the other hand had seen a thread on here before that Lynne had added an excel spreadsheet for in-comings and outgoings. I can safely say this has been such a lifesaver :). I now use it for my husband as he is a self employed carpenter. I have a blank copy saved to my laptop if you would like a copy, just PM me :):)

Leely x
 

Steph86

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I do my own, I keep on top of it every month or so, then its not a big job at the end of the tax year.

Im mobile, & apart from double checking my receipts the thing that takes me the longest to work out is milage. I use the AA route planner.

1st year no problem, 2nd year 1 question had me baffled (I was carrying a loss forward) I called HMRC & they helped me straight away.

Keep all your receipts, good record of your appointments & what you charged (& milage if you are mobile) I put my car through at 0.45p per mile. Rather than working out %'s as I also use my car for my employed job, & seeing friends etc.

Xx
 

squidgernetball

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I am of the opinion that if you are going to pay tax, rather than give it to the tax man, pay for something that will make you life easier, and pay less tax!

It has taken me some years to actually earn an income that I have to pay tax on. So much is tax deductable. I had an accountant for my first year who I paid about £18 a month to and he literally put it all together and did my return. There are also accountants who will do your return for you, at a cost of about £100 which they reckon they can save you on your return anyway. I am just thinking that an accountant may be a good idea for me as my tax bill this year is quite high!
I would say that if you're just starting out, keep a list of your outgoings, your incomings, any mileage you do - if you're home based or salon, any trips to wholesalers etc. If you look liable for tax when you do your return, get advice then.

Vicki x
 

laurakate

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Yeah he said it'll cost me about 300 to 400 for the whole year. I think that's a bit steep considering the small amount of data I'll be asking him to process for me but he also knows about what I should and shouldn't pay in terms of tax and NI and in the nicest possible way, I can't imagine the taxman writing me a nice letter telling me if I've overpaid them by doing my tax return on my own (cynical lol!)

On the one hand I think do I *really* need someone to do it for me considering I think I'll earn well below the tax paying threshold anyway but on the other hand I figure that having an accountant is more reputable in the sense that I don't want hmrc writing back to me saying "we think you've told us wrong".

Hmmm...
 

Steph86

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Yeah he said it'll cost me about 300 to 400 for the whole year. I think that's a bit steep considering the small amount of data I'll be asking him to process for me but he also knows about what I should and shouldn't pay in terms of tax and NI and in the nicest possible way, I can't imagine the taxman writing me a nice letter telling me if I've overpaid them by doing my tax return on my own (cynical lol!)

On the one hand I think do I *really* need someone to do it for me considering I think I'll earn well below the tax paying threshold anyway but on the other hand I figure that having an accountant is more reputable in the sense that I don't want hmrc writing back to me saying "we think you've told us wrong".

Hmmm...
Yes they do tell you if you have paid too much tax (Tax rebate). This will only really happen if you've been employed. They wont ask you to pay more than you owe.

If you are under the tax threshold there isnt too much to worry about, apart from entering your info correctly.

I get letters /invoices through out the year for my NI.

I was quoted £600, for an accountant when Id only been open 6 months & hadn't made a profit!

Mine is probably a little more complicated as I am employed too.

It really isnt that hard. Id rather spend that money on stock, training etc.

I agree with someone above, maybe if you get to a point where you have a large tax bill it maybe time to get an accountant. Whilst you are just starting out I'd give it a go yourself 1st.

Xx
 
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Biljana

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I keep my spreadsheets squeaky clean. All my receipts and incomings are neatly scanned, entered and saved, hard copies filed away. However, as good as I may feel about my abilities I will not risk hurting myself or the business by filing on my own. My mother in law is a chartered accountant and the amount of credits available from the "tax man" are incredible, so much information that in my own I would have never known about! There is a very good reason accountants spend time and money on school, 4 years here to be an accountant. It is not an easy job and one has to recognize that, at the end of the tax year it is better for your business to have a professional handling it. My opinion :)


Cleen Cheeks Spa
 

laurakate

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Yes they do tell you if you have paid too much tax (Tax rebate). This will only really happen if you've been employed. They wont ask you to pay more than you owe.

If you are under the tax threshold there isnt too much to worry about, apart from entering your info correctly.

I get letters /invoices through out the year for my NI.

I was quoted £600, when Id only been open 6 months & hadn't made a profit!

Mine is probably a little more complicated as I am employed too.

It really isnt that hard. Id rather spend that money on stock, training etc.

I agree with someone above, maybe if you get to a point where you have a large tax bill it maybe time to get an accountant. Whilst you are just starting out I'd give it a go yourself 1st.

Xx
£600 ni!! That sounds terrifying in proportion to what I initially expect to earn! When I spoke to my potential accountant on the phone I told him what I expected to earn and that I reckoned I'd have to pay voluntary ni contributions (the £2.50 per week thing) but he said if you earn below a certain amount you can claim exemption.
 

Steph86

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£600 ni!! That sounds terrifying in proportion to what I initially expect to earn! When I spoke to my potential accountant on the phone I told him what I expected to earn and that I reckoned I'd have to pay voluntary ni contributions (the £2.50 per week thing) but he said if you earn below a certain amount you can claim exemption.
No no no, sorry didnt mean to scare you, just re read it... I wasnt very clear £600 for accountant! Xx

*edited previous post to make it clear*
 

Steph86

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Yes if you earn under approx £5,000 (or make a loss) you can be exempt from NI. I didnt realise this & paid my 1st year, in two instalments it was around £150. So wasnt too bad. Xx
 

perfect10kb

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£600 ni!! That sounds terrifying in proportion to what I initially expect to earn! When I spoke to my potential accountant on the phone I told him what I expected to earn and that I reckoned I'd have to pay voluntary ni contributions (the £2.50 per week thing) but he said if you earn below a certain amount you can claim exemption.
Laura Kate and Steph 86 Do NOT go for exemption from your Ni . BIG mistake . It will effect your pension believe it or not . pay the voluntary contribution . Its very little and you can pay it monthly by direct debit . Think its about £12 per month

x
 

Steph86

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Laura Kate and Steph 86 Do NOT go for exemption from your Ni . BIG mistake . It will effect your pension believe it or not . pay the voluntary contribution . Its very little

x
Yes, agreed! Im employed too, so I thankfully already pay NI. I hope *fingers crossed* to be in profit this year :) once My business is making over the £5,000 il be happy to pay both. Xx

You need 30 years of NI, for your pension so when I worked abroad for a year I got an NI invoice, being 20 at the time with 3 years paid NI they advised me not to worry about the missing year as I had time to make up my required years. Xx
 
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loulou86

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Would the price he has quoted you be for the whole year?

From speaking to my hairdresser who is self employed and mobile she has advised me her accountant only asks for her work diary. She has shown me she writes clients name and treatment then price, then will add in a receipt if she buys anything and highlights the important things like VAT number, company, date, price etc.

I on the other hand had seen a thread on here before that Lynne had added an excel spreadsheet for in-comings and outgoings. I can safely say this has been such a lifesaver :). I now use it for my husband as he is a self employed carpenter. I have a blank copy saved to my laptop if you would like a copy, just PM me :):)

Leely x
Hi Leely

Would it be possible to have a copy of the spreadsheet too? I'm just starting up my home salon business and have been trying to put one together but that would help me lots! :)

I can PM you my email address if that is ok? x
 

Dream Nails

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Laura Kate and Steph 86 Do NOT go for exemption from your Ni . BIG mistake . It will effect your pension believe it or not . pay the voluntary contribution . Its very little and you can pay it monthly by direct debit . Think its about £12 per month

x
NI is £10.60 a month x
 

beautybyab

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Hi ladies
If you are already employed part time & pay NI as well as being self employed part time but not making a profit do you also need to pay the voluntary contribution?
Hope that makes sense..
Thank you x
 

Steph86

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Hi ladies
If you are already employed part time & pay NI as well as being self employed part time but not making a profit do you also need to pay the voluntary contribution?
Hope that makes sense..
Thank you x
No & you don't have to worry if you are exempt for a year loosing out on your pension. As you are already paying NI.

Once your business makes around £5,000 you must pay NI from that business as well.

You just have to call NI & they will ask you to fill a form in & return it. Then you will receive an exemption.

Xx
 

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