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Changing Accountants

Case study: Moving from a traditional high street accountant to a specialist contractor firm

Like moving banks or changing your energy supplier, changing your accountant may seem like a huge gamble which (you may think) requires months of meticulous planning. However, nothing could be further from the truth.

Read how Malcolm, an IT Contractor in London, made the move and hasn't looked back since.

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How to change accountants: Malcolm's story

"Prior to leaving the perceived safe and cosseted world of permanent employment (whatever that means) and making the move to become a contractor, I did lots of research about the various methods of operating which really came down to using an umbrella company or working through my own limited company.

I asked contractors I worked with how they worked - limited or umbrella company - and views were fairly mixed. Some liked the admin-free life of using an umbrella company whilst others preferred the control and financial benefits of working through their own limited company. Both groups seemed happy with their choice and I could see the benefits of each.

I was pretty sure when I left permanent employment I'd be a contractor for a while, so I decided to take the limited company route. I secured a contract position and went about forming a company and appointing an accountant.

Choosing a firm of accountants came next. I knew I wouldn't need Deloitte or Ernst and Young, as my accounting affairs would be quite simple; I wouldn't be buying any stock, have huge numbers of customers or renting/purchasing any company premises.

I approached a small local firm with a typical high street shop window. They seemed like nice guys, they charged a standard set fee payable at the time of my year-end accounts, a fixed quarterly fee for VAT, payroll and PAYE, plus admin fees for letters and calls to them.

  1. Bookkeeping - antiquated systems that involved me sending paper copies of sales invoices, purchase invoices and receipts for business expenses to my accountant quarterly - believe me, this is a real pain photocopying everything and sending it all recorded delivery.
  2. Not contractor-friendly - issues around IR35, Managed Service Company and Personal Services Company legislation weren't easily answered and I often came away feeling I should really do my own research to protect myself.
  3. Complicated fee structure - which left me not knowing exactly how much I would be paying at the end of the year. It wasn't that the fees were excessive, it was just that they were unpredictable.
  4. The elusive accountant - yes the firm was friendly and yes it did live up to its promises and SLA's. However, I often wasn't able to speak to my accountant as he was frequently out meeting larger clients.

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