August 23, 2021

Adam Rawling

Do I need an accountant for a limited company?

Taking care of all filings with HMRC and Companies House, payroll for your employees and the overall management of your business’ finance may seem an interesting task but it is equally hectic, hugely time consuming and can easily frustrate you. Most businesses including SMEs and large organisations rely on accountants for all aspects of their accounts related management and it actually streamlines their business operations, but the question arises that is it mandatory to hire an accountant for your limited company?

It is not a legal requirement that you must hire an accountant for your limited company. However, if you have minimal accountancy knowledge and growth plans for your business then hiring an accountant can ease your many troubles, take care of your filing your statutory accounts, preparing and filing VAT, Corporation Tax and Personal Tax returns, manage employee’s salaries, and other essential finance related issues, such as bookkeeping, budgeting, cashflows and maximising your tax efficiency. Moreover, toppling all the benefits, it can help you save a lot of time which you can invest to expand your business or put efforts in creating new opportunities instead of exhausting yourself completing your accounts.

A good accountant will be there for you to lean on, remember even though their main area is accountancy, they likely run their own business and have worked with many other businesses meaning their knowledge of business will be invaluable to your new limited company.

Many of the areas which an accountant can handle for a limited company which will be essential at the start of your journey are briefly listed below:

Registering and setting up a new business
An accountant can help you in the initial days of registering business with Companies House and for the appropriate taxes with HMRC, providing you with extra time to solely focus everything else a new business requires. The accountant can help you to understand tax liabilities ensuring you are being the most tax efficient as possible.

Payroll and Pension Management
Although most of the large companies have in-house accountants, most small companies cannot afford this luxury and they opt to outsource. An accountant can effectively manage your company payroll and pension right from the collection of time sheets through mobiles apps, excel or paper, right through to providing the net pay figures for employees, amounts owed to HMRC and the pension providers then emailing the payslips to your employees in time for payday.

Furthermore, an accountant can also help you save on the costs relating to payroll software and training of the relevant staff.

Value Added Tax
VAT is without doubt the most confusing tax when for most business owners. If you need or it is beneficial to set up for VAT, this will most likely need the advice of an accountant, also if you do need to VAT register you are likely to need to be compliant for Making Tax Digital (“MTD”), this mainly means you need to be on a software such as Xero and all avenues of income and expenditure must have some form of a digital link.

Initially until April 2020, and then until April 2021, HMRC considered the cutting or copying and pasting of data, for example, from one application to another, to be a digital link. From April 2021, this was no longer be considered a digital link thus another connection is required. A digital accountant, such as DIGI will be able to help, assist and integrate this for your business.

Keeping a record of every transaction, receipts and invoices is a very frustrating, time-taking and dull task yet very important to keep the accounts trouble free and produce the records if HMRC ever request these. An accountant can help you get rid of this trouble, and keep a record of every single transaction through your limited company accounts. At DIGI, a simple set up we use to ensure bookkeeping is kept in a healthy shape is the use of Xero and Dext, two apps which ultimately means your bookkeeping is kept digital and paperless

Filing tax returns and accounts
Large companies have a whole department that handle all the nit and grit related to tax, filing VAT returns, PAYE submissions, etc. However, if you are running a limited company with minimal knowledge, an accountant can handle and prepare all of this. Trying to do this yourself could lead to paying additional tax, penalties and fines which would end up outweighing the accountant’s invoice!

Avoiding penalties and fines
There is so much scope for penalties and fines with HMRC and Companies House. Hiring an accountant will protect you from this, ensuring filings are made on time, correct and you are notified of what payments to be made well in advance of any deadline.

Apart from the obvious that an accountant usually does, there are numerous other benefits. The role of an accountant will ensure everything is handled correctly and smoothly, so long as you hire an accountant with a good reputation. Check Google reviews, trustpilot and often enough ask your friends, family and connections in business to see if they can recommend, alternatively speak with DIGI.

Why choose DIGI Accountancy as my limited company accountant?
We believe that you put every inch of your effort and hard work in making your business successful and we live by our promise of helping people outperform and succeed in their businesses.

DIGI is equipped with professional and top-notch accountants with years of experience in hand who know every single hurdle that can limit your business growth. With the right skills and exceptional customer service, clients not only trust us as an accountant, but many also have placed their outmost confidence in us for taking care of all their full finance function.

Want to know more? Contact us:
Call: 0161 250 7500
WhatsApp: 07491035984

All information is correct as at 23 August 2021.


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