Many sole traders, partnerships and limited companies are under the impression that they need an accountant. The truth is that there is no legal requirement to have your accounts prepared by an accountant unless your Limited Company is large enough to require an audit. This equates to a turnover of more than £6.5m, more than 50 employees and a balance sheet turnover of more than £3.26m.
If your business does not require an audit you are legally required by HMRC (and Companies House if you are a Limited Company) to have and submit correct financial information by set deadlines.
Sole Traders are required to complete a Self-Assessment Tax Return.
Partnerships are required to complete a partnership Tax Return, and each partner also needs to complete a Self-Assessment Tax Return.
Limited Companies are required to complete an Annual Return, CT600 Company Accounts, and Directors are required to complete Self-Assessment Tax Returns.
Any business with employees needs to complete payroll weekly or monthly via RTI (Real Time Information) software and submit to HMRC.
It is also incredibly important for businesses to understand their finances. Up to date financial information is essential to the successful running of any business, however small. Financial analysis can help with business decisions and give an accurate picture of the position of the business.
A bookkeeper with the correct training, experience and knowledge can do all of this. Whilst you can also prepare and submit your own accounts & returns, accounts prepared externally (by your bookkeeper or accountant) will be taken more seriously by your bank or other funding sources should you need them. If you submit incorrect accounts / tax returns it is up to you to prove that this is a genuine mistake / oversight and not a deliberate act of fraud.
Many small businesses outsource their accounting, having a professional assist with not only the day to day bookkeeping but the preparation of quarterly/annual accounts ie Profit & Loss and submission of the required documents can generally save the business money. A qualified bookkeeper will also help you to understand the figures, what they mean and the impact of that information on the day to day running of your business.