Choosing your accountant
Choosing the right accountant for you and your business is crucial. You need to be able to trust your accountant to do the best for you, to give you accurate advice and to present your affairs in an honest and accurate manner to the taxman.
Get it wrong and you may face the wrath of HMRC and full-blown investigation into your affairs, in which you will be expected to produce all your records going back years and you may be expected to justify each and every item of spending.
My first recommendation is that you choose professionally qualified and regulated accountant. In effect that either means an ACCA-qualified accountant or, more likely, an ICAEW-qualified accountant. ACCA and ICAEW are accountancy institutes that not only set qualification standards but regulate their members. ACCA members are generally called certified accountants and ICAEW members are called chartered accountants.
"It's fun to charter an accountant.....and sail the wide accountancy" - Monty Python
Be warned: anyone can call themselves an accountant. Many are not qualified or only partially qualified. Only regulated firms come with any official guarantee and back-up – they must carry professional indemnity insurance, for example, to cover any errors or omissions they make.
It has been known for an accountant with a large entertainment-based clientele to come unstuck with the Revenue and have certain expenses challenged. This results in HMRC investigating every single client and demanding back payments of tax for exaggerated expenses claimed.
Why a chartered accountant?
Michael Izza, chief executive of the ICAEW, said: “When hiring an expert for any job, a client wants to know they are buying expertise based on quality, honesty and efficiency. It is also vital that the ‘expert’ is suitably qualified, has undergone the correct training and is subject to some kind of regulation to ensure a high quality of service. This is true of doctors, teachers and lawyers, and ought to be for accountants too.
“Chartered accountants have all these qualities, and we want people to know that even in their day-to-day life our members can be an invaluable help in saving you money. You can definitely count on a chartered accountant.”
Before becoming a chartered accountant and using the designatory letters ACA or FCA, ICAEW members must:
- undertake a period of at least three years’ training with an organisation that is authorised by the ICAEW
- pass exams covering financial management, auditing, business strategy, taxation and IT
- undertake a programme of Continuing Professional Development, which demonstrates their commitment to high standards.
The ICAEW said it also ensures that chartered accountants develop communication skills, business awareness and professional judgement.
Finding an accountant
To find a chartered accountant, the ICAEW provides a search function on its website (new window), which will list firms by name or location and by their specialist area.
But try to find one that others in your field use. They will know the rules governing your sector and have a good idea of what others like you have successfully claimed as legitimate expenses.
You may also want to think about whether or not you have ambitions to be more successful in the future. Some accountants handle thousands of similar clients sausage factory style – and that may be ideal as it keeps costs low.
But if you hope to be more successful and have a growing income, consider a slightly bigger accountancy practice with a broader range of skills and experience. It will be able to grow with you and provide new, different advice and accounting support as your circumstances change.
And spare a thought for the chartered accountant who really wants to be a lion tamer.