Do I Need An Accountant If I’m Self-Employed?

In my years of experience as an accountant in UK, I have come across many self-employed who consistently doubt hiring an accountant. Today, I look forward to assist those people who have this specific question – Do I Need an Accountant If I’m Self-Employed?

1) Know Your Status

In my years of experience as an accountant in UK, I have come across many self-employed who consistently doubt hiring an accountant. Today, I look forward to assist those people who have this specific question – Do I Need an Accountant If I’m Self-Employed?

To begin with, self-employed can be in two forms – freelancer/ sole trader and contractor. If you are a freelancer/ sole trader and your personal management of invoices, receipts and other tax-related documents is good, then you don’t need an accountant. However, if you are a contractor, you may be required to maintain complex transactions which includes adjustments of VAT and reconciliation of statements. Therefore, it is definitely a yes!

2) Know Your Taxation

As a self-employed, you should posses high understanding of taxation and allowed deductions if you are looking to avoid an accountant. This is because there will be areas such as Income Tax, Corporation Tax, IR35 and VAT that will contribute towards computing your tax due. Any misleading information or computation error can attract heavy penalties. Presence of an accountant helps you cover the chances of faux pas.

3) Computation of Time Factor

It is common sense to focus more on income. As self-employed, one always needs to be aware of the available financial opportunities. If the same time is invested in managing accounts, then it is probably a lost opportunity to earn. Instead, hiring an accountant makes sense because a professional will take less time to prepare your books of accounts.

4) Professional Advantage

They say, find a man who knows his job. As self-employed, your job is to earn income out of your trade or contract-basis work. Since you are a professional in that area, you would offer the best output. Similarly, let your accounts be handled by someone who is a professional in the concerned area. When it comes to handling matters like IR35, Flat rate scheme, MTD (Making tax digital) compliance accounting and Child Benefit Scheme, knowledge and experience are mandatory. This is why most of the contractors prefer to keep an accountant.

5) Guidance on Financial Planning

Let’s say as self-employed, you are able to manage your books of accounts. But what about financial planning? Who guides you on investments? Who tells you the avenues whereby you can reduce your payable taxes? Who shares the latest amendments in the taxation provisions with you? An accountant not only helps you in maintaining your books of accounts, but also guides you towards a more financially stable future.

Thus, with all said and done. I’ll leave it on you to decide whether you need an accountant if you are self-employed. In case you want to have a quick chat with me over your financial planning or goals, feel free to reach me at 03301331114 or drop a mail at: [email protected]