traditional accountants vrs online accountants

[Dom at Fox Bartfield]

Accountants

There lots of smaller firms who are both contractor-specialist and able to provide the personal service redolent of a traditional practice. In my (less than impartial) view those are worth seeking out.

Also, Freeagent is a must. If the accountant doesn't support it, move on.

Agree with Alan, Freeagent is a must for contractors. Check the client to staff ratio of a firm which will be an indication as to whether it's a sausage factory type practice or provides a more personalised service.

[kaiser78]

[Googles "redolent"]

Also worth pointing out most "online accountants" will come in at give or take £1k/year all inclusive (well, some may have a few exclusions that are charged as extras, eg personal tax returns, or registered office address). If your local accountants are suggesting £3-4k, then they're significantly pricier.

Yeah but these fees are excessively high. You will still find high street accountants who charge the same as the online ones, and specialise in IT contractor matters.

[Cid]

after looking at a few options, i think its going to be Gorilla for accounts and Qdos for insurance.

[craigy1874]

Agree with Alan, Freeagent is a must for contractors. Check the client to staff ratio of a firm which will be an indication as to whether it's a sausage factory type practice or provides a more personalised service.

This is only helpful if you give ratios to allow him to compare - you got any?

[Spoiler]

after looking at a few options, i think its going to be Gorilla for accounts and Qdos for insurance.

And IPSE+ ?!

[Alchemy Accountancy]

A couple of additional things that I would suggest doing when appointing an accountant, whether traditional or online:

1. Speak to the person that will be doing the work on your company, see whether you get on with them and check out their qualifications/experience (linkedin could be useful here). A lot of the time you will speak to a sales team who are incentivised only to sign you up.
2. The ownership of the firm. If the company is held for sale (private equity is heavily invested in the contractor market), then you aren't the customer - you're the product, and that drives a different set of behaviour from those managing the firm.

Hope this helps!
Craig

[Chart Accountancy]

So i have managed to go freelance and secure my first contract.

I have spoken with a couple of local accountants and the costs seem to be unclear and every increasing.
a few hundred for this and a few for that and next thing we are talking about £3-4k a year.
Even then its not entirely clear that everything is covered.

at the same time i'm looking at online accountants such as Gorilla and SG.
i like the idea of a fixed cost all in.

if i'm operating a very simple business.
1 invoice out per month.
expenses will basically be travel in the form of either train tickets or mileage.

i don't envisage it getting any more complicated.
my questions is will the online accountants be as tax effective as the local red brick chap given such a simple set up ?

All accountants work online so the difference between a local accountant and the so known 'online' accountants should not be the criteria to choose an accountant. Many online accountants also offer a personal meeting. We offer an initial meeting with clients who are local in the areas where we have a physical office. Otherwise, the accounting service is provided exclusively online with communication via email and telephone. It is difficult not to be online in this day and age so an online accountant is a must!

[JB3000]

So i have managed to go freelance and secure my first contract.

I have spoken with a couple of local accountants and the costs seem to be unclear and every increasing.
a few hundred for this and a few for that and next thing we are talking about £3-4k a year.
Even then its not entirely clear that everything is covered.

at the same time i'm looking at online accountants such as Gorilla and SG.
i like the idea of a fixed cost all in.

if i'm operating a very simple business.
1 invoice out per month.
expenses will basically be travel in the form of either train tickets or mileage.

i don't envisage it getting any more complicated.
my questions is will the online accountants be as tax effective as the local red brick chap given such a simple set up ?

As Dom and Craig have already said the 2 most important factors will be the experience/qualifications of the accountant who you will be dealing with on a daily or monthly or quarterly basis depending on how much support you require.

Just as important would be the staff-client ratio. You could have the best accountant in the world but if they are dealing with 200+ clients you will just be another client in a sea of clients and will probably fall through the cracks.

Also, it would be very good if the accountant provides you with a portal like Free Agent so that you can also see your taxes, dividends, salaries, etc. Without something like Free Agent (or Xero) you are effectively in the dark with regards to your finances.

If a traditional chartered accountancy firm can provide all the above for a reasonable cost then there is no harm going with them. Otherwise you may be better off using an online firm. It is worth noting you can always change accountant especially if you are using something like Free Agent because all your data will be in Free Agent and you can move your Free Agent portal around from accountant to accountant.

[Cid]

Just an FYI for anyone else in the same boat, i went for.

Gorilla Accounts = £85 a month (plus LTD setup)
Qdos Insurance = Just insurance but not Tax investigation insurance, but still get contract review.
IPSE = Mainly for Tax investigation insurance.

[Spoiler]

Just an FYI for anyone else in the same boat, i went for.

Qdos Insurance = Just insurance but not Tax investigation insurance, but still get contract review.

For clarity then, is "just insurance" including both PII and P&EL ?