The typical tasks of a limited company contractor accountant
A specialist contractor accountant will help you with your tax and accounting needs when you set up and run a limited company.
The tasks of a limited company accountant are varied and often complex. While some contractors may feel confident to take on these tax and financial obligations, most feel more comfortable handing over this responsibility to a professional contractor accountant.
You will need to pay a contractor accountant for their services. These fees are usually charged on a monthly basis and vary greatly depending on the firm you use and the level of service you require.
Here are some of the core tasks of a limited company accountant:
Setting up your limited company
- Companies House incorporation: a contractor accountant will incorporate your new business on your behalf. This is a simple process, which costs £12 if the forms are completed directly on the Companies House website. Your company is usually registered within 24 hours.
- Tax registration: a limited company accountant will register your company to pay VAT, Corporation Tax and PAYE/employer’s National Insurance.
- Business bank account: a contractor accountant will open a business bank account for you, which is a necessity when running a limited company.
- Set up your online accounting system: most contractor accountant firms will provide you with an online accounting system to help you keep on top of your books. These vary between providers, but such portals usually offer you a simple way to input your transactions, expenses and other financial activity.
The core tasks of a limited company accountant
When it comes to the day-to-day running of your limited business, a contractor accountant will usually help you with the following tasks:
- Complete your tax-related paperwork: this includes the completion of your quarterly VAT returns, your annual CT600 Corporation Tax return and your company’s annual accounts (which are sent to Companies House and HMRC).
- Deal with HMRC: a contractor accountant will deal with all of your HMRC-related correspondence, including any tax-related queries or changes to your personal tax code.
- Deal with Companies House: a limited company accountant will also complete your company’s Confirmation Statement and submit the relevant paperwork to Companies House.
- Complete your payroll: if you operate as a limited company, you typically pay yourself a monthly salary. Your contractor accountant will run the monthly payroll for one employee, but may charge extra if you have any additional employees. Your limited company accountant will also submit this payroll data to HMRC via the UK Government’s PAYE RTI system.
- General accounting advice: the tasks of a limited company accountant should also include answering your day-to-day financial questions such as dividend planning advice, for example.
Additional tasks of a contractor accountant
Some limited company accountant firms use a hierarchical price system to charge more for specific services.
However, these add-ons may not be needed by your business if, for example, you operate outside of the IR35 or do not employ any additional staff. So, make sure you work out what level of service you require from your limited company accountant.
Here are some common additional services:
- IR35 contract reviews: depending on the nature of your business, you may need a limited company accountant to advise you on the IR35 status of a contract.
- Personal self-assessment tax return: a contractor accountant may complete your personal self-assessment tax return on your behalf.
- Bookkeeping: most contractor accountant firms will provide you with an online accounting portal so you can easily input your transactions and keep an eye on your finances.
- Provide references for mortgage companies and letting agencies: finding a mortgage or long-term let can be a challenge for contractors without such support.
- Register as your office address: if a limited company accountant registers its office address as your office address, then all the official HMRC paperwork goes straight to your contractor accountant.
- A dedicated accountant: most professional firms will assign you a dedicated contractor accountant. This gives you a single point of contact, which is a useful resource and provides consistency of service to your business.
- Further financial advice: some contractor accountant firms may have other in-house resources or can refer you to partner firms to help advise you on aspects such as your mortgage or pension advice.
- Switching service: if you decide to change your contractor accountant, then some firms will help you to make this transition.
The relationship between you and your accountant is core to the success and profitability of your business. To find out more and compare the available contractor accountants, visit Contractor UK's contractor accountant directory for a comprehensive list of specialist contractor account providers.