If you have settled on the fact that being a contractor is the next step in your career, then your first decision thereafter should be choosing an experienced contractor accountants.
The choice is a hugely important one and not to be taken lightly. A great accountant can save you many times your accounting fees by efficiently looking after your tax affairs.
Make sure the accountant is a specialist in contractor affairs and understands key issues such as IR35.
Most high street accountants are unlikely to have this specific knowledge and should be avoided if this is the case, even if they appear cheaper in comparison to other accountants. The money saved on priced will be lost quickly through an insufficient service.
You should also take the time to find out whether the accountant is registered with a professional accountancy body, such as the Association of Chartered Certified Accountants (ACCA), or the Institute of Chartered Accountants in England and Wales (ICAEW).
If they aren’t, it may be time to keep looking.
Accountancy firms vary in size enormously, and you should choose one that suits your purposes.
A larger practice might have thousands of contractor clients. This would bode well for their understanding of IR35 and other issues, overall creating a safe space for your business to fit into their portfolio.
On the other hand they may deliver a rather impersonal service and might not be right if you have a particularly unique set of skills to a client.
With such a large client base, time is of the essence for larger firms and this can often lead to a one-size-fits-all scenario, with the end result meaning your business isn’t given the attention it requires nor are you truly getting enough bang for your buck.
On the contrary, a smaller firm can deliver a more tailored, bespoke service, specifically designed for you and your business alone. Ultimately, a smaller firm like this can not only justify their fee, but also help you identify ways to grow your business, too.
Experienced contractor accountants will have a thorough understanding of IR35 and how both tax planning and budgeting around the IR35 tax legislation works.
Make sure the accountant genuinely knows all about IR35, and hasn’t just added it to their list of services in the hope of attracting extra business.
Some more experienced contractor accountants also offer contract reviews where they can assess a contractors IR35 status.
Many non-contractors are content to let their accountants perform a whole range of tasks that contractors are responsible for performing themselves and which have been effectively barred by the Managed Services Companies legislation.
Contractors should ensure that their contractor accountants only perform legitimate tasks and avoid the MSC rules.
Good contractor accountants will pay for themselves by saving your time and money with correct tax planning and management of legislation risks such as IR35. If you don’t feel they are doing a good job you should be prepared to find a different accountant.
If a contractor is moving from one accountant to another, their existing accountant is obliged to pass on the contractor’s records to their new accountant.
Changing contractor accountants can be a hassle, but if moving from a poorly performing accountant to one that comes highly recommended, it could ultimately save the contractor time and money.
Need a change? Get in touch with our team of small business accountants today and see how our extensive experience working with contractors can help you get the most from your work.