Many business owners go alone when it comes to managing their money. They don’t really enjoy bookkeeping or accounting. They might prefer using pens and papers to keep track of their finances.
While we should not go into conclusion that those businesses are worsen off due to not having an accountant, we cannot underestimate the breadth of knowledge and experience that accountants can provide. Accountants do more than just tax filing. They can take a comprehensive assessment of your finances and create a forecast through the year to keep your business at a healthy, prosperous state.
Getting an accountant or bookkeeper is a business decision. Investing in professionals can bring considerable returns.
These are several reasons why it is important to have an accountant for your business.
1. Save your time
Most entrepreneurs think that a tight budget means they won’t be able to afford hiring an accountant. But if you think about how much time and effort you spend on trying to manage your finances yourself (not to mention the possible errors you could incur during reporting, and related losses from poor financial decisions), the benefits certainly outweigh the cost.
Accountants can help you focus your business efforts on the really important (money making) stuff, whilst they take care of the other important (tax paying) stuff. It’s a win-win; you don’t get to waste time crunching numbers, and you get to spend time making more money.
2. Get all of your deductions
The majority of business owners spend a lot of time think about how they can maximize on their deductions. However, when the deadline for tax filing is coming, it is too late for an impact on that. An accountant can support you by easily identifying these potential deductions throughout the year and advise you how to make strategic decisions for year-end deductions.
3. Do your tax well and on time
Tax deadlines, limits and amounts due have an annoying habit of changing on a semi-regular basis. Overlook one critical change, and you could end up massively underestimating your next tax bill.
Late tax filing or payment can result in penalties and interests. When you get an accountant, you will be unlikely to miss more deadlines.
4. Business support and advice
Thinking of changing the nature of your business? It might be right that running a Limited Company is more financially efficient?
Accountants aren’t just there to help you with finances. Their support can improve your whole business setup. If you’re just starting out, they can cast a beady eye over your projections and financial plans. As your business grows, they’ll be able to run you through the various options available and point you in the right direction if you decide to change the structure of your business.
5. Plan for the future
Finally, one of the biggest benefits of hiring an accountant is getting advice on how to plan for the future. Together, you can pull reports from past months and examine the seasonality of your business. Doing this will help you determine the best time to buy inventory, and budget for big-ticket investments so that you can stay competitive and viable.
One of the most commonly asked question among new business owners…
What is a Limited Company?
A limited company is a separate legal entity that you can form to run your business – even if you’re a one-person business. As a director, you’re responsible for any legal and financial decisions the company makes. The company’s assets and liabilities are completely separate from your own personal finances.
If you decide to set up your own limited company, you’ll be a director and a shareholder of the business. You can be paid a salary and/or dividends from the company’s available profits. The company must make various annual returns and file annual accounts with statutory bodies such as Companies House and HMRC. There are also several deadlines and responsibilities.
What about Sole Trader?
If you’re a sole trader, you run your own business as an individual and are self-employed. You can keep all your business’ profits after you’ve paid tax on them. You’re personally responsible for any losses your business makes.
Advantages of running a Limited Company
As the company is a separate legal entity, your personal assets are protected. If your company needs to close or experiences financial difficulties, your personal assets cannot be taken from you to pay company debts.
Minimising PAYE Tax and NIC
As a sole trader, all of the profits made by your business are taken as income. You’ll pay income tax and National Insurance Contributions (NIC) based on government thresholds.
Through operating as a limited company, you’ll pay Corporation Tax (currently at 19%) on your company profits, and can pay yourself through a combination of dividends and salary. This will minimise your PAYE (tax you pay on your earnings throughout the year) and NIC outgoings.
As a sole trader, you rely on your personal credit rating to borrow capital used to grow your business. A limited company can establish its own credit rating, which can support borrowing to invest in the business.
Advantages of staying Sole Trader
Both sole traders and directors of limited companies are required to submit a personal Self-Assessment to HMRC, but those operating a limited company must also submit extra paperwork to regulatory authorities (Corporation Tax, Annual Accounts, VAT returns if VAT registered). Failure to submit returns on time usually results in significant penalties. As a sole trader, you’ll avoid the headache of these returns.
Limited companies must share certain information with the public, such as filing annual accounts and stating the names of directors and shareholders on public registers at Companies House. As a sole trader, you don’t have to provide this information to Companies House.
1. Choose your type of limited company
The two main choices are:
Private Limited Companies (LTDs)
Public Limited Companies (PLCs)
Most freelancers, contractors, start-ups and small businesses will opt for a Private Limited Company, as PLCs must have a minimum share capital of £50,000, at least two shareholders, two directors and a qualified company secretary.
2. Choose a name
Like a website, your company your company name has to be completely unique. You can differentiate in a few ways to guarantee a unique name for example using either “Limited” or “LTD”. You can find available company names using the Companies House WebCheck service.
3. Enter your company information
When you register a new company (UK), much of the information you provide will be made publically available. Companies House will want details of your:
Company directors – your company must have at least one director. Companies House will want to know their name, date of birth and residential address.
Company shareholders – every company must have at least one shareholder, but this can be the same person as the director. Companies House will want to know their name, date of birth and residential address.
Registered office – this is the address where Companies House and HMRC will send mail. It must be in the UK and it must be possible to reach the company directors at the address.
4. Complete the incorporation process
Companies House is responsible for all limited company registration in the UK. The following documents must be completed and returned to Companies House in order to complete the incorporation process:
Memorandum of Association – limited company name, location, business type
Form 10 – director’s names, addresses and registered limited company address
Form 12 – states the limited company complies with terms and conditions of the Companies Act
Articles of Association – outlines director’s powers, shareholder rights etc.
That’s it! Your company is then set up!
The business name can be registered with the UKNO1 Company Formation but you have to make sure that no other company is registered with the same name that you are using. Companies house has rights to reject the names that uses sensitive words or expressions or the names which are offensive.
When the name is been officially agreed, then the Companies House will issue a certificate for the confirmation of the registration and to add the name of your company to its registered list of companies that are available to public. When you are set to choose a business name make sure to get a matching website domain.If you find a domain name that is not being used yet, then you can obtain that domain from an online domain marketplace for your own use. There are generally two versions one is the dot.com and the another is the dot.co.uk. The dot.com version is for running the business overseas but if you think that you want to run your business only in the UK, then its better to have the dot.co.uk version.
Trademarking is essential in preventing others from using your business name once you complete your registration with your corresponding domain.
Web design San Software Limited involves a wide range of disciplines including creating user experiences across different platforms as laptops, tablets and smartphones. This is known as responsive web design. We develop software depending upon the nature of business, and our developers make sure it benefits the Customer’s business with shortest peroid of time.
We’ve always choosen a business-focused approach to web design through high-performing apps and web development that includs specific functionality for a website. We are providing best web developement service for your business, with the help of our high skilled designers, developers, with real scopes and real results.
We are delivering world class solutions to our clients through the creative designs and usage of latest technologies to industry with best practices. Now these days, everyone spending more time on their mobile devices. Our team provides with unique mobile apps having interesting features and enhanced functionality.
Speak to us now on 077 1479 4024 or we can call you any time fromBook a Callback