Being a contractor – sometimes called freelancing – can be quite a complicated area when it comes to accounts. Because you are working for someone else, sometimes for a relatively short time, sometimes on a rolling contract, you don’t usually have simple finances, because they can vary very much from year to year or even month to month. There are also quite a lot of legal requirements for you to consider as a contractor, for example special insurance policies and your contractor accountants can help you with these to look for a great bookkeeper.
Chartered Accountants for Contractors
Not all chartered accountants are expert in the rather special needs of a contractor so it is worth shopping around for the right one. If visiting a website, look for phrases such as ‘accountant for freelancers’ or ‘accountant for contractors’ because it is much more likely your affairs will be handled speedily and efficiently by someone who has a bit more specialist knowledge. There is various tax legislation – for example IR35 which relates to employing ‘disguised employees’ – which only an expert would really understand and of course there is new legislation coming on stream all the time.
Make sure that when looking for a contractor accountant that you know what you will be getting for your money. If your business grows, you will need to take on staff and there is a lot of legislation (not just IR35 as above) which needs to be considered. You will need advice with employers’ liability insurances, PAYE and a lot of other things which may not be in the basic package. If your circumstances change, it is very important to contact your accountant straight away, but remember that some will bill you for every meeting or even every phone call, so get that straight from the outset.
Some larger accountancy firms have departments dedicated to one specific sector of the business and if this is the case which the contractors’ accountants which you have chosen, make sure that you make contact with everyone who is likely to be dealing with your accounts. In a very large firm it is easy for a business which does not need constant intervention to slip between the cracks and get forgotten.
This will never be intentional but even the best run offices has an off day. Keep in touch and if you think they have made an oversight, don’t be afraid to tell them. If you were promised a call, an email or a letter, remind them – if you just let it hang in mid-air your issue may never be resolved. If they are on the case, they won’t mind; if they had forgotten, they will be grateful for the timely reminder. This is not ‘interfering’ – it is just sound business sense.
Limited Company Accountants
It may be beneficial to your business to form a limited company. There are various tax advantages to being a limited company, but again it is important to engage an accountant for contractors who understands how a limited company should be set up. Not all accountants do more complex procedures such as this and so you should make clear that your accountant is able to do more than balance your books.
Every business expects to grow and so it is wise to take on an accountant for freelancers who will be able to continue to help you when your business affairs become more complicated. If you are likely to be working for more than one client at a time, you should ideally have a blanket insurance policy in place which will cover you against mistakes by you or any member of your staff you may delegate tasks to – your accountant will be able to advise you how to choose the right policy.
Contractor Accounts Specialists
Contractors come in all shapes and sizes and no one can be an expert in all the disciplines covered by that simple phrase, but being an expert in contractors and their needs in general is not difficult and many accountants decide to specialise. They make sure that they are constantly updating their knowledge base in the sometimes quite complex legal requirements of a contractors’ chosen business style. Essentially, a contractor works for another person, providing services or expertise, either permanently or for a single job.
This is not always clear-cut (for example, an architect could work for a single building company, but on a job-by-job basis) and can cover a wide range of specialities, from building to alternative health therapies.