Top 10 Tips
If you are looking to hire a new contractor accountant, here are ten key things to consider before signing up – based on our own experiences.
These 10 tips were compiled by the ITCA team. We have had years of experience as IT contractors ourselves, and 15 years running contracting industry magazines and websites. We deal with contractor accountants all the time, mainly working on editorial ideas – and for commercial reasons as well. We hope that this guide will help would-be and existing contractors form a shortlist of potential candidates to look after their accountancy needs!
1. Always hire a contractor specialist.
A dedicated contractor accountant will understand how your business operates, and should have an intricate knowledge of industry-specific tax legislation, particularly IR35. A specialist will be aware of the nuances associated with working in this industry, which a high street accountant may be unaware of.
2. Price is a consideration, but just one factor.
The monthly fees charged by most contractor accountancy firms are competitive on the whole to the costs of hiring a typical ‘small business accountant’. You can pay from as low as £50/month to in excess of £120/month for all-inclusive services. However, there isn’t necessarily a direct correlation between price and quality of service.
3. Ask what is included in the monthly fee.
Always advisable to ask, in case there are any hidden extras lurking. You should be provided with a complete list of services you will receive each month, as well as duties completed annually (such as filling in your company annual return). Don’t be afraid of using our popular checklist to help you think of useful questions to pose to prospective accountants.
4. Will your accountant set up a limited company for you to use?
And if they will set up a limited company, is there an additional fee for this? It is not unreasonable to have to pay for this service, but some providers have been known to overcharge. Anything up to £150 might be considered reasonable considering the time it takes to complete the formation process, and the associated formation costs, such as registering your company for VAT, informing HMRC of your existence, and setting up your company payroll for the first time.
5. If you are moving from another accountant (for whatever reason), how much will your new accountant charge to make sure your books are all up-to-date?
Again, it is only reasonable to expect to pay for the time taken, but not be overcharged. The more time that has passed since your last company year-end date, the more time your new accountant is likely to need to put your books in order.
6. Ensure your accountant is qualified by a recognised national accountancy body.
If they are qualified, the firm will typically have the following initials on their website or stationery: ACA or ACCA (England/Wales), or ACAS (Scotland). To complete certain tasks, more junior or administrative members of staff will have to get the ‘all clear’ or signature of the qualified person before they can proceed.
7. Ask to speak to current clients.
Ask any accountancy prospects if you can speak to, or email/phone any current clients before making the move.
8. Find out how long as the accountancy firm been operating, and how many clients it has.
How much experience does the firm have in dealing with IT contractor clients specifically?
9. Does your accountant offer online accounting?
These days, some kind of online accounting service is the norm. Both client and accountant can save a massive amount of time by using web-based accountancy software for everything from invoicing clients to even submitting your quarterly VAT return online. From our experience at ITCA, although some purely online accountants offer very impressive web solutions, contractors need reassurance that they can speak to a real person should they need to.
10. Ask for recommendations.
Above all, ask contractor colleagues of friends for accountancy recommendations. Although there are some benefits to seeking online provider reviews, the more traditional route remains the best method of choosing a potential accountant.
As a starting point, try our list of contractor accountants for some specialist firms.
A list of some of the UK's leading specialist contractor accountants.
Top 10 tips for choosing a contractor accountant
This is a great place to start when looking for an IT contractor accountant.