Survey Confirms High Street Accountants are a Risk for Contractors

Good contractor accountants can be difficult to find. From our position as contractor specialists it’s often frightening to see the kind of advice contractors are given by accountants in general practice. For example, we interviewed a lady who’d been advising locum doctors about the Public sector IR35 changes. When asked what her firm had done she replied,

                “Nothing, they’re all outside the changes as they all have contracts in different hospitals with different NHS Trusts, so more than one engager.”

                This probably sounds perfectly reasonable if your expertise lies in heart surgery, but as specialist contractor accountants we can see the rest of the story, and it doesn’t end well for any of the doctors receiving this advice. Having spent their days saving lives, their reward is the wrong end of an HMRC investigation. The story ends with their companies crippled by debt and their names on a credit blacklist, all because they trusted the wrong accountant.

                Of course this is all anecdotal, but a mystery shopper survey of more than a dozen high street accountants now confirms what we already knew. Researchers were offered off-the-shelf incorporation services, which are prohibited by Managed Service Companies legislation of 2009, and others were told not to worry about IR35, and even that it had “died a death”. A picture of widespread and shambolic incompetence emerges, and one fears for the hundreds of contractors who are currently paying for, and risking their financial futures on, this kind of advice.

                To be clear, we believe all this advice was offered in good faith. But it was also offered by people who didn’t have the expertise necessary to answer the questions they were asked. This survey underlines the need for contractors to engage a specialist contractor accountant, like Orange Genie Accountancy.

 Alasdair McGill, MD of Freelance World who conducted the survey, said “The poor advice some firms give to prospective clients genuinely alarms us. Many high street accountancy firms simply do not have the expertise to advise contractors on key legislation, compliance and management of their specific requirements.”

He went on to say, “Most contractors do not understand the legislation that governs them as freelancers and contractors as much as they should. That is why it is crucial they get the correct advice.”

As a director of your limited company, the buck very much stops with you even if you rely on incorrect advice from your accountant. Since 2009, non-compliance could see HMRC adding your name to a blacklist, so the consequences of following bad advice could be with you for many years.

As well as revealing a shocking lack of knowledge about key legislation, the survey also found that general firms were not offering the full range of options for clients, often shepherding them into running their own limited companies when it wasn’t the ideal option for them. A contractor specialist, like Orange Genie, will make sure you have all the information you need to make an informed choice, and we’ll be able to help whatever working arrangement best suits your needs. 

As accredited members of FCSA we’re independently audited against the most demanding compliance standards in the industry, and we’ll support you with the very best specialist advice, tailored to your specific circumstances and goals.

To find out more about how Orange Genie can support you and your business, please call our expert team on 01296 468 483 or email info@orangegenie.com

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