Contractor Accountants
Limited company contractors who use contractor accountants to handle their financial affairs assume that their accountant is completely compliant and ensures that the contractor’s company manages its accounts within the law.
But how can you check if your accountant is compliant? Here are five checks you can use to make sure contractor accountants are compliant:
Anyone can keep books, complete tax returns and file accounts and perform those tasks on behalf of a contractor limited company. But if you choose an accountant that is a member of and regulated by one of the four accounting professional bodies then you know that in order to gain its membership the accountant must demonstrate a degree of professional competence and has to abide by the rules of the professional institute and are required to operate compliantly. Accreditation by a contractor industry body is a good indicator of compliance as these organisations rigorously audit their members or affiliates regularly.
Although contractor limited companies are small businesses, they have unique features and, most importantly, are subject to legislation that most other small businesses are not such as IR35 and the Managed Services Companies (MSC) legislation. If you choose a high street accountant that is not a specialist in contractor affairs, they may not understand the technicalities of the MSC legislation and undertake activities leaving them in breach of the rules and you facing possible penalties.
There is a line that a compliant accountant won’t cross. What that means is although you don’t need to become a tax expert yourself, you do need to take responsibility for the company, tax and financial paperwork contractor accountants send you. Make sure you read through your tax return and ensure all your paperwork has been completed in full by your accountant and they are completing your paperwork compliantly.
Contractor accountants that file important paperwork with HMRC and Companies House past the deadline, thus incurring penalties, are not delivering accountancy services compliantly. Repeated late filing should set alarm bells ringing and if the accountant is a member of a professional or industry body, then you should complain about your accountant’s performance.
All accountants regulated by professional bodies have a duty to pass on your records to their replacement if you choose different contractor accountants. But not all accountants make it easy for their clients to switch. Check with other contractors who have been clients of a particular accountant, on the internet and in chat rooms to confirm your current or future accountant behaves compliantly when you want to move.
There are thousands of contractor accountants in the UK and you can visit various websites to download checklists you can use to evaluate your choice of contractor accountant before choosing one for your contractor limited company.
