Do you need an accountant?

When starting a business accountants can provide a wide range of services. You can talk over the records that you need to keep for the business and whether you need to register for VAT.

Accountants provide a wide range of services. When starting a business you need to talk over with an accountant what records you need to keep for the business, how much to set aside for Income Tax and National Insurance, how to notify the Inland Revenue (and who else you should notify) and whether you need to register for VAT.

You might also want assistance in raising finance and preparing a business plan, whether to use accounting software to keep up with progress of the business, and, if you intend employing people, payroll preparation. As the business develops you might want a wider range of advice including personal financial planning, tax planning and advice on forming a limited company as well as more general business advice.

Obviously it is difficult to be too prescriptive about the cost of such a wide range of potential topics. Most accountants charge on the basis of the time spent on a client’s affairs. A very small business with good basic records might pay £400/£600 in the first year for advice on setting up, preparing a set of accounts and a tax return and agreeing the first year’s liabilities with the Inland Revenue. You should meet at least three firms and ask for an estimate. But you would be advised to go with the one who is most interested and knowledgeable about your business rather than the cheapest.

Many business people value their relationship with their accountant and regard them as their most trusted adviser – always available at the end of a phone. For more information and to find a Chartered Accountant go to ICAEW.

See also: Small Business guide to hiring an accountant

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