IT Contractor Tax Limited Company Accounts Accounting

A new generation of technology savvy accountancy service providers are forcing traditional high street accountants to look at their customer service practices which could spell the end of charging for accountancy advice on an hourly basis according to Brookson.

As a leading accountancy services and tax advisor to contractors, Brookson has witnessed many of the companies that serve the UK contractor market implement innovative new business models in the face of shifting legislation.

Martin Hesketh, managing director of Brookson, explains:

"The new MSC legislation has meant that we - and everyone else in the industry - had to fundamentally change the way in which we operate. It also meant that as a tax advice and accountancy services provider, we were put in direct competition with the more traditional high street accountants. As a result, a quiet revolution seems to be taking place in the accountancy and tax advice market as companies develop a smarter way of working for themselves and their contractors and we believe this could spell the beginning of the end for the hourly rate of the high street accountant.

"First of all, a contractor selecting to work with a new tax advice and accountancy services provider as opposed to a high street accountant should know exactly what charges they face up front. Traditionally, this has not been the case with high street accountants. This is because by the nature of the services they provide, companies such as Brookson are committed to an end product at a clear and transparent cost. Service users should know, up front, exactly what they are paying for before they hand over their hard earned money, not billed at the end of a given period. This is a smarter way of managing your businesses costs. Accountancy service providers can do this because of the technology and systems they have in place.

"Another example is add-on products. Self-assessment forms are now integral to anyone operating in business on their own account and must be completed at the end of each financial year. For the majority of high street accountants, this would be an additional service, charged at an additional cost. Likewise financial references for mortgage applications etc. The new accountancy service providers are including these as part of the overall package, not for an additional fee which means no surprises or additional costs for the contractor.

"Working smarter also comes down to technology. These new accountancy service providers have strong IT systems in place and the right tools to act as a day-to-day accountant working within a business. Small businesses need access to key information when they need it and this is not facilitated by the hourly rate when a monthly visit from an accountant is considered adequate. The systems that many accountancy service providers operate allow a contractor to access their accounts online and in real time 24 hours a day. Traditional high street accountants can't compete with this. In effect we are giving small businesses access to big business technology without the need for big business investment.

"Access to guidance is also a vital aspect for contractors, particularly in a market where compliance is key.

"IR35 remains the legislation that determines the employment status of contractors and it would be rare to find a high street accountant that is fluent in IR35 and able to give the best possible advice on compliance and taxation specific to contractors. There is also a difference between guidance and advice. Can a traditional high street accountant provide a contractor true advice that would leave them completely sure of their position?

"From the contractors perspective, competition between service providers is a good thing. It drives innovation, improves quality and can reduce costs, however value for money is more than just cost. Access to valued services and technology that helps a contractor to run their business smoothly and efficiently has a value all of its own. On the face of it, paying a traditional accountant that operates to an hourly fee may appear the best option but are they really getting value for money?"