Accountancy for contractors, freelancers and small businesses across London

• Access to premium online software packages
• like Xero Accounting and FreeAgent Accounting.
• Full and comprehensive customer support from trained personnel.
• VAT advice and guidance.
• Targeted bookkeeping services.

We understand that the needs of every contractor will be different. We have therefore designed a method to adapt our services around the needs of the client in question. This will further help to minimise your expenses over time.

• The quick completion of annual tax returns.
• Minimising expenses and maximising profit margins.
• Thorough records management.
• Redundant cloud-based support systems.

The most common options for structuring a new business is either as a sole trader or a limited company.

Sole Trader

Where you choose to operate as a sole trader, you become your business and your business becomes you. The benefit of setting up as a sole trader is one of simplicity. Your year-end will typically be the same as the April to April fiscal year and you’ll report all of your business income and expenses in an annual self-assessment tax return along with any other income you may have personally incurred throughout the year.

Sole traders are also subject to the normal tax rates of 20% tax, 40% tax and 45% tax along with their associated bandings. If you would like any further advice please call us for a free consultation.

Limited Company

Where limited companies are different is that the structure separates you as the director from the company as the company becomes an entity in its own right. The result of this is that there are slightly more onerous reporting and compliance requirements and as a result you will almost certainly require an accountant to complete this work and keep up to date with the relevant deadlines as they arise.

The way funds are extracted from a limited company is very different too as you must pay corporation tax on all company profits each financial year. You must then pay personal tax on any profit you withdraw from the company (dividends) for which you will be charged specialist dividend tax rates which are generally lower than standard personal tax rates. Naturally a limited company is slightly more complex but does come with it’s benefits we can guide you through most complications, so you know what the best next step in a complimentary phone call is.

Here at One Abacus we encourage all our accounting clients to take an interest in their accounting as it is an important part of understanding the business. All our packaged services come with accounting software as standard and we offer this as it helps us to manage the financials and ensure accuracy on a real time basis.

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One of the great positives of accounting software is that it makes you do tasks in the software which have to be done anyway. Tasks such as raising invoices directly from the software and having your banking information pulled straight in to the software for us to view, which improves efficiency and cost as the accountant is not having to duplicate your information at year end.

Other benefits

1. Full app intergrations so you can keep track of you expenses on the move like expensify or receipt bank.
2. Real time up to the minute reporting
3. Raise invoices on the go

Using accounting software also means that you can get accurate up to date reporting which is vital for planning and decision making in any organisation where otherwise clients would have to wait until year end, which in many cases just would not be practical.

Registering for any relevant taxes at the point you start trading – In most cases this simply means self-assessment for sole traders and corporation tax for Limited Companies but you will also have to think about additional tax services such as PAYE if you have any employees or VAT if you have turnover over a certain amount. With PAYE and VAT there are also regular reporting deadlines through the year that must be adhered to, so this is something else that must be considered and where a good accountant will come in very useful.

Keeping good records – You may not have had to keep financial records before, but as a company owner you must do your due diligence. Fortunately, at One Abacus we make the process simple and painless as we work very differently from many of our competitors. Done are the days of endless streams of paper, as now with the right accountants who understand modern software’s it need not be so daunting. This means issuing an invoice or receipt for every sale and keeping receipts and invoices for each and every purchase. If you have to register for VAT this becomes even more important as you must separate out those transactions with VAT from those without.

If you would like a consultation on how we can help you use your technology to cut down your burden of managing receipts and paperwork then get in touch for a complimentary consultation.

Keeping thorough records of cash transactions which you can do either through software or through use of a book or ledger to record cash transactions in and out of the business.

Annual reporting of income and expenses to the relevant bodies. In the case of sole traders this means to HMRCs Self-Assessment department by means of a Self-Assessment tax return usually submitted by an accountant or the business owner themselves. But for Limited Companies this will mean a Corporation Tax Return, an annual confirmation statement to Companies House and most important of all a set of statutory accounts. In some cases, clients are able to complete the self-assessment tax return on their own however the greater regulation around limited companies means that statutory accounts and corporation tax returns often require the assistance of a qualified accountant at least.

It needn’t feel like this with the right advice and assistance but even so there are a number of things you should be aware of before taking on this responsibility.

A limited company is its only legal entity and is almost entirely separate from you as the owner / director. It is therefore important that everything is kept separate such as bank accounts, invoices and expenses. A limited company will always require its own bank account.

Limited companies are more highly regulated and require very specific information to be filed (accounts, confirmation statements, tax returns) at similar times each year and to multiple different organisations (Companies House and HMRC).

The reports that are required by Companies House and HMRC need to be in very specific formats and will almost certainly require the specialist knowledge of a qualified accountant to complete them.

You will still be required to complete a personal tax return in addition to the filing requirements of the limited company. At One Abacus we include tax returns for directors on all of our monthly limited company packages as standard.

The expenses that can be claimed by limited companies are often different to those that can be claimed by sole traders. In the initial stages, it is therefore advisable to work closely with an accountant, as a limited company director, to ensure compliance with the different tax rules.

As an individual legal entity, the process of opening and closing limited companies is much more involved. A qualified accountant can remove this burden from you but it’s important to know that company responsibilities cannot be turned on and off overnight.

These are just some of the main things that you need to consider when starting a limited company and the list is by no means exhaustive, please contact us if you would like a complimentary consultation. Whilst it might look complicated, it needn’t be with the right information and support. At One Abacus we always take the time to understand the prospective business first so that we can advise whether a limited company will be the best route and if it’s not, we will always say.