Online Accountants for Startups

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Startup Accountancy Services

Startups are exciting and innovative, but can also be complicated and difficult to run and manage in the first few months.

The way your business starts can have a huge impact on the future of the company, so you will want to ensure that it receives the right attention and care from day one, in areas such as funding, budgeting, and structure.

If you’re new to the world of business, then there is a good chance you don’t know all of the ins and outs of accounting, bookkeeping, tax returns and National Insurance. This is where online accountants and cloud accountancy software can come in.


Defined as “a newly established business”, a startup is a fresh company with no previous trading, custom or clients. Therefore, their directors or owners may not know much about the financial or legal obligations, so outsourcing some help could be beneficial.

In the early days, issues such as investment, financial forecasts and competitiveness will all impact your future in the micro-entity world and determine whether you go on to become a larger business or cease trading altogether.

Legally, all businesses in the UK must keep a record of their financial situation and transactions, and hold these for at least six years. Bookkeeping alone can be daunting for those who don’t know what they’re doing, and that is only the beginning of your accounting journey. Online accounts can make things much easier, and ensure you keep on top of it all.

Taxes To Pay

The taxes your startup pays will depend on the build and size of the company. Some which may apply to you are:

  • Corporation Tax: Paid by limited companies, and charged against profits (expenditure minus allowable expenses)
  • Income Tax: If you are a sole trader, Income Tax will be paid instead of Corporation Tax. you’ll start paying once income goes above the allowable income threshold
  • VAT: This applies to most products and services sold in the UK, and mandatory with income above £85,000 but you can actually register at any time if it is beneficial
  • National Insurance: You must pay NI contributions on any staff wages, but if you are a director of a limited company, you must also pay them on your own income
  • Business Rates: Depending on the type of business you have and location, you may have to pay rates to the local council, like a Council Tax. These will fluctuate depending on location, type of business and type of building

Making Tax Digital

From 1st April 2019, Making Tax Digital is becoming compulsory. This should make it easier for businesses and individuals to file their finances, record everything and send the information to HMRC.

Because it is becoming a requirement to be part of the MTD scheme, it will make sense for any startups to start as they mean to go on and immediately undertake the use of online software to keep track of everything. No more filing receipts in shoe boxes and leaving it until the last minute to make a note of it.

Accountants are already using online software, but as there are so many varieties out there, they can choose which is best for you and talk you through what you must do and how.

Why An Accountant Is A Good Idea

Learning all of the ins and outs of HMRC legislation, tax compliance and accounting is something which could take months (if not years). Even if you prepare before setting up your business and do all of the research, it can still be daunting getting to grips with it all.

An accountant can offer:

  • Advice And Reviews: Before, during and after your setup, if you just need to check something, know what the best online bookkeeping service/business bank account for your needs is or ensure you are staying compliant with the laws and regulations, an accountant could help
  • Bookkeeping: An accountant can decide how often to maintain the books and accounts (weekly/monthly/quarterly/annually), and do it on your behalf with the data you provide them with. Or, they can provide you with the best online service which allows you to automatically update your accounts as and when if it is best for your business
  • Annual Accounts: These have to be submitted to HMRC so they can calculate the tax you owe. Get them wrong or send them too late, and there could be sufficient fines and penalties. Having an accountant to hand could mean more accuracy and better timekeeping
  • Tax Returns: Once everything is calculated, the tax return will have to be filed. From filling it in to sending it, this can be done on your behalf
  • Claims And Allowances: Businesses can receive some tax-free benefits or claim back certain expenditures, and an accountant can ensure you don’t pay a penny more than you have to. Software can separate and categorise all expenditure
  • VAT: Businesses with a turnover of £85,000 must register for VAT, but it may be beneficial to do this if you’re under the threshold too. An accountant can advise, sign up on your behalf and tell you how best to implement this if you have customers or clients, working out how much you owe on a quarterly basis and claiming back any which you are entitled to
  • Payroll: If you employ at least one person, you must have a payroll and PAYE scheme in place and deduct NI payments/pension contributions/tax/student loan payments if applicable. This can all be done for you, using an online platform
  • HMRC Representation: There is little chance your paperwork will be investigated by HMRC, but if they need extra information or some proof of claims, your accountant can deal with all of this

Every business is different, and every startup needs to stand out from the crowd to succeed. If you want help with this, the accountants we feature offer a bespoke, thorough service for all of your particular individual needs, whenever you need it and for however long.

We know that you will be wary of costs and overheads, so an online accountant who uses online software can help keep the cost low for you while giving you maximum control.

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