Picking an accountant – a contractor’s checklist

An accountant – Why bother?

  • A good accountant will give you peace of mind that your business’s tax affairs are in proper order. This is not to be underestimated, particularly when you think what a wilderness the UK’s tax system is.
  • Having your accounts and tax return prepared professionally provides additional security If you want to borrow money, or go into a joint venture with another business. Some lenders may want to see accounts prepared by a qualified accountant before they’ll consider lending you any cash.
  • A good accountant will also act as your agent with HM Revenue & Customs and field any awkward queries, and be at your side if HMRC visit for an inspection.
  • A good accountant will understand why you’re in business, and advise and charge you appropriately. If your business is a hobby business and your accountant tries to push you into forming a limited company alarm bells should start ringing.

There’s so many. How should I pick?

Be careful, because anyone can call him or herself an accountant. It’s not like a doctor or a solicitor. The term ‘accountant’ is not legally protected, which is why bookies can call themselves ‘turf accountants’!  

Some people say that you should always look for a qualified accountant, because descriptions such as “Chartered Accountant” are legally protected, so you can’t call yourself a “Chartered Accountant” unless you really are one.

What makes a good accountant?

Plain English-speaker

First and foremost, look for an accountant who can speak plain English. It’s your business, you’re responsible for it to HMRC and potentially also Companies House, so it’s vital that you understand what’s going on in the finances. If you don’t understand what your accountant’s talking about, don’t be shy – ask them to explain further. If you still don’t understand, find another accountant!

Fixed fees

Look for accountants who charge fixed fees, rather than charging by the hour. That way you avoid any nasty surprises in the shape of unexpectedly large bills. Does the fee include software for you to use to keep your books – and, even more importantly, will it cover training for the accountant to teach you to use this software?


And while we’re on the subject of bookkeeping software, does the accountant offer software that’s suitable for your business? Lots of accountants love Sage 50, which is great for some businesses, but don’t let them give you Sage 50 if your business is very small and simple, or if you don’t know double entry bookkeeping. If you’re in that situation, Sage 50 will be a sledgehammer to crack a walnut!


Is the accountant experienced in your type of business, either because they’re worked in that industry themselves, or have lots of clients in that field?  For example, when I had my own practice, Home Business Accountant, I worked from home myself, and only took on clients who also worked from home, because I had first-hand experience of their issues.

They’re not stuck in the past

Is the accountant forward-looking? The world is going online. Will your accountant be left behind? Do they have a good website with up-to-date tax tips and advice, written in plain English? If their website is written in accounting-speak then they will probably speak accounting-speak at you!


Look for an accountant who has good contacts. Many accountants will be able to link you up with a good bank manager, solicitor, or independent financial adviser (IFA). Accountants are very seldom allowed to help advise you about investments and pensions, which is why you may also need an IFA.

Your own agent

And look for an accountant who’s happy to act as your agent with HMRC, so that they will speak to HMRC directly if any queries crop up in your tax affairs. This will save you having to deal with HMRC yourself. Your accountant will give you a form to fill in for this, or they may be able to file it online.

This article is an extract from Finance for Small Business – A straight-talking guide to finance and accounting, by Emily Coltman, chief accountant at Free Agent, whose permission was given for this edited reproduction on Contractor UK.

Editor's Note: Related Reading -

Changing your contractor accountant

Contractors' Questions: Is my accounting fee fair?

Contractors' Questions: Is an accountant entitled to my bank statement?

Contractors' Questions: Is changing accountants a red flag to HMRC?

Contractors' Questions: What are Payments on Account?

Wednesday 28th Sep 2011

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