I’m a sole trader. Should I hire an accountant?
So, you’re a sole trader. One of the most popular ways of starting a business in the UK is setting up as a sole proprietor. You’re in full control of the business and how it is run, not to mention that you’re able to employ a family member. What is certain is that it’s better to start up as a sole trader than using your family’s discretionary trust. If you have opened a business, then you definitely need the help of an accountant. People who are self-employed believe that they will not see large incomes for some time and consequently not hire a bookkeeper, which is a mistake. If you don’t have a background in accounting, it’s a good idea to hire a bookkeeper. Sole trader accountants have specialist knowledge and they don’t cost a fortune. So, the answer is yes, you should hire an accountant and this is why.
Getting help with tax
Sole traders are required to pay tax just like everyone else, but this should not come as a surprise. The amount of income tax you have to pay depends largely on the profits that you make. Knowing how much it’s necessary to put aside for the taxman is essential. You have to determine how your business is doing financially and complete the self-assessment tax return. It’s needless to say that you can’t do this all on your own and that you should seek the assistance of a trained professional. An accountant can help you avoid potential trouble with the HM Revenue & Customs.
You don’t know what you are getting into
You may be tempted to think that you can manage the financial aspects of the business on your own. After all, being a sole proprietor is nothing like the other types of businesses. When it comes to the recording of financial transactions, you need to seek the opinion of a bookkeeper, if you do not have knowledge in this area of course. Practically, you don’t know what you are getting into. Although there is software now that can help you manage your finances, if you’re not familiar with this area, you’re still likely to make mistakes. No computer program can replace actual knowledge.
Focusing on your product/service
While you have more freedom as a sole proprietor, you also have more responsibility. The one thing you should focus your attention on is your product or your service. Your success depends on your ability to make profits, which is the reason why you need to make sure that your products/services stand out. The best thing you can do is delegate responsibility, namely entrust a trained professional with the bookkeeping.