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Do I need an accountant for my trade business?

Reading time: 4 minutes

Using an accountant helps free you up from paperwork, letting you focus on the work you enjoy. You don’t have to use an accountant, but it can free up your time and help your business grow.

When you thought about going into a trade you probably imagined picking up your tools and using your expertise on-site or in a customer’s house, but it’s all too easy to find yourself caught up in endless admin and paperwork instead. And when it comes to the financial side of things it’s easy to get tied up in knots.

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Do I really need an accountant?

The simple answer is no. There’s no law which says you have to have one unless you’re turning over millions of pounds a year.

  • If you run a one-man band, operating as a sole trader and are comfortable with maths, basic finance and paperwork then you can do your own books. You should be able to handle day-to-day money and your self-assessment tax return, and there are a range of online tools and services available to help.
  • If the way you run your business is more complicated, and you’d rather focus on helping your customers - or numbers make you break out in a cold sweat - then an accountant can really help.
  • There’s no way to dodge paying tax to HMRC. And depending on how much money you’ve got coming in you’ll also need to pay VAT. That means keeping on top of invoices and receipts and hitting the deadlines for payments to the tax man. That can be overwhelming, especially if you’re working long hours or away from home.
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The benefits of using an accountant

  • Your customers could plumb in their own toilet or build a wall, but they call you in because your training and experience creates a better result. Using an accountant is the same - they have more expertise when it comes to tax, profit and expenses and they’ll keep you on track.
  • If you’re set up as a limited company, or have employees or subcontractors meaning payroll and Contractor Industry Scheme (CIS) deductions, then an accountant can handle VAT, PAYE, annual returns and company accounts.
  • They’ll show you which expenses you can claim back, and that can reduce the amount of income tax or corporation tax you pay.
  • They can help you get organised and create good financial habits. Lots of accountants include a simple online system in their fee so you can track costs and send out invoices. Good accountants will talk you through the records you need to keep and recommend alternatives to a paper bag full of receipts.
  • Think you might need to borrow money from the bank at any point? They’ll take you more seriously if you’ve got professionally prepared accounts.
  • You have to pay your accountant, but they can end up saving you money. Find someone who’s upfront about their fees and offers a fixed cost. They help you spot the places you can cut overheads or claim expenses, increase profits or reduce how much you hand over to the taxman.
  • As well as saving you money, they’ll save you time. You’ll spend fewer hours organising receipts, checking invoices and expenses or on the dreaded annual self-assessment tax return. You can focus on getting more work and looking after your customers.
  • You might just be starting out or running a small business but if you have plans to grow, hire people or add different services then your accountant can help you plot what that might look like and show how that changes your finances.
  • Finally, they can help you think about the future, whether that’s sorting your pension or getting your accounts ready for a mortgage.

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How do I find one?

You can find accountants through recommendations from other tradespeople, or simply search online to find a firm near you. Do some research and look for accountants that have a reputation for dealing with buisnesses like yours, so you can be confident they’re up to date and experienced with the rules and regulations that will impact you.

Look for accountants that are members of a recognised accountancy body, like the ICAEW (Institute of Chartered Accountants in England & Wales) or ACCA (Association of Chartered Certified Accountants), and that have a solid indemnity policy, that can protect you in the event they make a mistake.

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How much will it cost?

Depending on the exact services you need and the size of your business, the cost of using an accountant can vary quite widely - typically, monthly costs could be as low as £30 to £50, rising to £100 to £150. For larger, more complex businesses, costs can easily rise to four figures.

Speak to more than one firm and get quotes, making sure you check exactly what services they’re offering, to make sure you’re getting a good deal that works for you.

While some people might prefer to go it alone, an accountant can ultimately be invaluable - and while they handle the paperwork, you'll be free to focus on doing what you enjoy.

Accounting and tax