When it comes to finding the right small business accountants or contractor accountants, there’s a few things you should always look out for: transparency around fees, friendly and approachable team, dedication to compliance, minimal jargon use, to name but a few. While some things are true across the board, it’s also important that your chosen accountant ticks the boxes for your individual needs. If you’re planning on scaling your business, for example, can your accountant provide you with the right financial insight that helps you grow in-line with your long-term strategy? 

We’ve put together this guide to help you get familiar with what accountants do, the different services they offer, the benefits of having an accountant, and what you should look out for when finding one. 

What do accountants do? 

Accountants are professionals who manage financial records, ultimately ensuring accuracy and compliance with laws and regulations. They prepare financial statements, analyse budgets, and provide insights into the financial health of a business or individual. Accountants also help with tax planning, audits, and financial forecasting, offering advice on how to improve financial efficiency and minimise risks. Their work is essential for making informed business decisions and maintaining financial transparency. 

Benefits of Having an Accountant 

Whether you’re a newly formed business, a contractor newbie, or a seasoned professional, having an accountant by your side is a sure way to remain compliant, on the right side of HMRC, and steer clear of penalties. Tax season can be stressful at the best of times, and with a host of incoming legislation and tax changes this April and over the coming months, it’s going to become increasingly difficult to stay abreast of the latest news and tax intricacies.  

An accountant can handle the complexities of tax for you. From looking over your paperwork with a trained eye to catch any inaccuracies, to identifying the best tax reliefs to minimise your tax liability, the benefits of having an accountant are endless.  

What’s more, if you’re looking for a way to improve your business management or create a long-term financial strategy, who better to assist you than a trained professional with years of experience doing exactly that? This kind of financial planning is vital for sustained growth and stability. 

Breaking Down Accountancy Terms 

Do you ever feel as though accounting sounds like an entirely different language? You wouldn’t be the first person to think just that. When searching for an accountant, one of the most important things to look out for is that they don’t overwhelm you with fancy words and unnecessary jargon that leaves you feeling lost and confused.  

Here’s a few key terms every start-up and entrepreneur should know: 

• Profit and Loss Statement: Also known as an Income Statement, a profit and loss statement is a summary of the business’ sales minus the expenses over a particular period. 

• Cash Flow: Refers to the movement of money in and out of your business and shows what physical cash you have available. Can be current or forecast. 

• Balance Sheet: a financial statement that gives a snapshot of a company’s assets, liabilities, and equity from the preceding financial period. This is a rolling statement that shows the balance on the date it’s run. 

Accounting doesn’t need to be complicated. The best accountants are the ones who adapt their language, allowing for easier and more open communication. Always aim for transparency rather than ambiguity when searching for the right fit for you.  

How to Plan for Year-end Taxes 

From planning for retirement with the right pension plan to maximising your tax-free allowance, finishing the tax year strong is just as important as looking ahead to the new tax year and making future financial plans. 

Here’s a few things to consider when planning your year-end taxes: 

• Utilising tax-free allowances: The current 2024/25 personal allowance lets you take £12,570 of income tax free. The same allowance remains for 2025/26.  

• Maximising your tax band: If you’re a director operating outside of IR35, you can take a salary of your own choosing, as well as dividends to top up your income. 

• Planning your pension: You can pay up to £60,000 into your pension pot in the 2024/25 tax year using personal and/or company contributions. Remember, if you haven’t used up allowances from previous years, these are also payable into your pension pot as extra. 

• Reviewing your shareholding: It can be efficient to gift shares to a spouse or civil partner, though there are strict rules around this. You can read more here.  

An accountant can help you work through your year-end taxes and make sure everything you file for is accurate. 

Filing Self-assessments 

As a self-employed professional, filing self-assessments is a staple when it comes to completing yearly taxes. A self-assessment tax return (SATR) is essentially a way to report income earned in the previous tax year to HMRC. It’s your responsibility to calculate your tax, allowable expenses, etc. and file an annual return with HMRC as well as submitting payment.  

Failing to submit your SATR on time (31^st October for paper, 31^st January for online) results in an immediate penalty which grows over time the longer you leave your payment and filing outstanding. Working with an accountant ensures you never miss a deadline, as they will be one step ahead of important dates coming up and can help you with the filing process. 

Changing Legislation 

Perhaps the biggest benefit of having an accountant is that you have someone who stays on top of changing laws and regulations, which means you don’t have to. You can have full peace of mind and rest easy knowing that you’ll be informed of key developments affecting your professional life, while focusing solely on running your business. 

Most recently, the government has confirmed that significant changes will be made to two out of three threshold classifications for a ‘small company’. The thresholds for Annual Turnover and Balance Sheet Total will both be increasing, while Number of Employees remains the same.   

What does this mean? Many medium and large companies may now find themselves classed as a ‘small company’ instead. This shift will have a knock-on effect on IR35 (also known as off-payroll working rules) as the responsibility for determining the correct employment status will once again shift back to the contractor. You can read more about these changes and how best to prepare by heading to our recent blog. 

Benefits of Being a Caroola Client  

Did you know that, aside from first-class accountancy services, you get a variety of perks when you become a Caroola client? Here’s just a few of things can get access to: 

Caroola Rewards: Fancy savings of up to £1,200 each year? You can shop at top brands such as John Lewis, Boots, JD Sports, Beaverbrooks, Starbucks, JustEat and so many more!  

MyMarketplace: A space designed for you to unlock exclusive offers from a curated list of our most trusted service providers. Whether you’re in the market for mortgages, insurance, pensions, healthcare, and more, you can find a long list of special deals here.  

Refer a Friend: If you know someone who needs an accountant, refer them to us and bag yourself £50 each! Plus, you’ll be automatically entered into a prize draw for a chance to win £300! Click here for details about our Refer a Friend scheme. 

Conclusion  

If you want to find out more about our accountancy services, feel free to get in touch with our dedicated team. Whether you’re looking for limited company accountants or contractor accountants, we can help.