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Choosing a Limited Company Accountant

If you’ve started trading through a limited company, or are thinking about moving away from a sole trader or partnership status and setting up a limited company, then you’re going to need a bit of help with your accounts!

There are many benefits to operating through a limited company, but they do have more complex compliance requirements when it comes to your accounts and tax.

Not only will you have to file your company accounts at Companies House, but you’ll need to submit your accounts and corporation tax return with HMRC too. In addition to that, you’ll have to file a self-assessment tax return as a director of a limited company. Yikes – that’s a lot of extra work for a small business!

In short, you’ll need accountancy services from a qualified accountant to keep you ahead of the game.

But don’t worry – we’re here to tell you everything you need to know when you look for your Limited Company Accountant.

What does a Limited Company Accountant do?

Limited company accounting is a little more complex than accounting for a sole trader or a partnership. Limited companies have to consider additional filing requirements and tax returns, as well as making that the owners of the company are withdrawing their money in a legal way while considering tax efficiency. That’s what it’s important that you look for expert advice when you become limited.

Good limited company accountants will undertake the following:

  • Bookkeeping
  • Data entry
  • Year-end full accounts
  • Abbreviated accounts (or filleted accounts)
  • Corporation tax returns
  • Self-assessment tax return
  • Tax efficiency advice
  • Advise on or supply online accounting software
  • Review accounting software
  • VAT returns and advice
  • Payroll including PAYE/National Insurance submission
  • Provide expert advice
  • Provide a dedicated accountant
  • Have professional indemnity insurance
  • Provide peace of mind
  • Deal with HMRC for you

An accountant’s combination of skills and experience as listed above will make sure that your limited company is fulfilling all of its accountancy and tax obligations while also giving you, the business owner, peace of mind that they will take care of HMRC stress for you – something that is completely invaluable for small businesses; after all – you should be focussing on growing your business, not faffing around with tax!

Do I need a Limited Company Accountant Legally?

There is no legal obligation for a small business to have an accountant, whether they operate as a sole trader or a limited company. But there are certainly huge advantages to having a qualified accountant to look after your small business accountancy, especially as you’ll have to deal with Companies House as well as HMRC.

Advantages of a limited company accountant

  • Has been trained to do company accounts
  • Has been trained to do a company tax return
  • Experienced in advising on tax efficiency
  • Works with lots of limited companies so understands their accountancy needs
  • Saves you time
  • Can help operate online accounting software
  • Understands the rules of corporation tax
  • Deals with submission to HMRC and Companies House
  • Provides expert advice
  • Saves you time, money, and tax!

And if you use a company like Mazuma for your limited company accounting (hint hint), you’ll get your own dedicated accountant, free online accounting software, and brilliantly low monthly fees.

Of course, if there are advantages to getting an accountant to sort out your limited company accounts, then, of course, there are disadvantages too.

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Disadvantages of hiring an accountant for your limited company

  • Limited company accountancy costs more than sole trader accountancy
  • You’ll need to be more organised with your books and bank statements
  • Your accountant will want to keep in touch all year – no once-a-year only check-ins!
  • They’ll give you the right advice, but you may not always like it! (HInt – tax-efficient doesn’t mean you won’t pay any tax!)
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How to pick the right accountant for your Limited Company

We’re going to be entirely honest here, most reputable limited company accountants will do a good job for you technically. As long as they are qualified, experienced, and hold the right insurances, you can’t go too far wrong.

Of course, there is more to hiring an accountant than just their technical ability to make you tax efficient. You’ll want someone in your business who you gel with and who understands you as a person. If you are a new business, then this is perhaps even more important as you work through all of the challenges and stresses that starting a new business can bring.

Limited company accountancy is about more than just tax, VAT, and payroll – it’s about looking at the motivations of the business as a whole and providing accountancy services that align with those.

Here are our top tips for picking an accountant for your limited company:

Don’t select only on price. The general rule here is that if something seems too good to be true then it usually is. A cheap headline price might be missing out on vital services that you need. Accountancy services are not a place to be scrimping.

Pick a service that suits your way of life. If you don’t want to be schlepping off to an accountant’s office every quarter then go with someone who operates online. If you hate the thought of online accountancy services then try someone local who can see you in person (although remember that face-to-face comes with higher fees as a rule).

Find an accountant that understands your business. If they tend to only work with large businesses, then it’s unlikely they’d be a good fit for a scrappy small business or a sassy start-up. Take a look at who their other clients are and see if they are like you.

Decide what is most important to you – is it saving tax, making a profit, or rapid growth? Will you need to borrow money for a mortgage in the next couple of years? If so, make sure your accountant understands that so that they can advise on the best route that aligns with your goals. Sometimes it’s not possible to have a super low tax bill and also get the house of your dreams.

FAQs

What’s involved in Accounting for limited companies?

Limited company accounting involves several financial duties, including preparing year-end accounts and submitting your business’ expenses and income to Companies House to assess your tax position.

The day-to-day responsibilities of limited company accounting include:

  • Documenting payments made and received by your business
  • Gathering receipts
  • Keeping track of invoice payments

To log this information before the end of the tax year, accounting software is required.

What Does an Accountant Do for a Limited Company?

All of the above, and more! Expect limited company accountants to:

  • Manage your limited company finances
  • Offer expert financial advice
  • Keep track of your business expenses
  • Help you apply for a business bank account
  • Ensure you pay tax on time
  • Support you in getting VAT registered
  • Organise your bank statements

Can Accountants Set Up Limited Companies?

Yes, most accountants can set up a limited company on your behalf. Our limited company accountants can register your business on Companies House for free if you choose to pay for our monthly service.

Do You Have to Pay an Accountant for a Limited Company?

You will need to pay a limited company to manage your business accounts. Additionally, you need to pay an accountant to set up your company on your behalf, whether as a one-time payment or as part of a monthly accountancy package too.

What Is the VAT Deadline for Submitting My Return Online?

The deadline for submitting the return online and paying HMRC is usually the same. It’s one calendar month and 7 days after the end of your VAT period.

What if I Get a VAT Inspection?

A massive bonus of hiring a team of expert accountants to take care of your VAT return is that you can be confident all the figures are correct. In this way, you don’t have to worry about unexpected VAT inspections.

What Happens if I Sign Up with Mazuma’s Accountants Service Part-Way Through the Year?

If you sign up with us part-way through your financial year, our accountants will likely need to play catch-up, ensuring your bookkeeping is up to date. For example, if you sign up with Mazuma in July, your first payment to us will be 4 times our monthly price to cover April, May, June and July. Don’t worry, though. You can split your catch-up payment over the first three months of your contract if you like!

Once you’re up to date, you pay your fixed monthly price. To complete your tax return, we only ask that you have been a client of Mazuma for one year or have made the equivalent of 12 monthly payments.

Why Should I Choose Mazuma Accountants Instead of a Local Accountancy Firm?

If you’re a limited company registered in the UK, you can choose between a traditional, local accountancy firm and online accountants for accountancy services. Ultimately, the choice is yours, but it’s worth considering that some local companies may not offer the flexibility you require for potential growth as a new business.

You can generally get a much more affordable, flexible service from an online accountant for startup businesses, like Mazuma. Our chartered certified accountants offer a fully online service, the most convenient option for a business owner with a hectic schedule who doesn’t have the time for in-person meetings.

How Is My Quote Calculated?

The quote you’ll receive depends on how much work you’d like us to carry out on your behalf. For instance, you may only need a limited company accountant to manage your monthly accounts. However, we also offer services such as VAT returns, additional payslips and payroll. We will use your information to determine the average number of bookkeeping transactions per month and calculate your quote.

Our expert financial advice is free, no matter how much you pay every month for our service. And our accounting technicians also offer a free phone consultation before you commit to our paid service.

When you’re ready to get started with Mazuma’s limited company accountancy service, click here to get a quote. It costs nothing and takes less than 1 minute to generate. 

Leave the Limited Company Accounting to the experts!

Unless you know what depreciation, amortisation, and annual investment allowance are, you should probably leave the accounting to us!

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