Do I need an accountant to set up a taxi business?
Setting up a taxi business comes with many costs and challenges. Becoming licensed, acquiring a car, managing customers and potentially managing other drivers are all consideration that take time and money. As a small taxi business, you will likely be looking to reduce costs because the more you save the more you can take home. With the ability to manage self-assessment and submit company accounts yourself, many may be tempted to forego an accountant to save money. But is this really the right thing to do?
A Cost or a Saving?
A good accountant will save you more than their fees. Whether you are an individual driver or a large firm, an accountant should be able to help you take advantage of tax relief and savings, whether structuring through a pension, drawing dividends or offsetting taxable income against shared household expenses. Time is also a cost, and an accountant will help you save time by processing your HMRC submissions, giving you more time to grow your business or enjoy well-deserved time off. So, whilst there are cost implications with engaging an accountant, it’s well worth asking them how they will save you time and money before making your mind up.
You may well be competent submitting HMRC submissions, self-assessments, PAYE, VAT etc. But are you 100% sure you’ve not made any mistakes? The consequences of improper submissions range from over-payment of tax through to interest payments, penalties and even criminal prosecution in the worst case. Hiring an accountant and assigning them as your agent will indemnify you, giving you one less thing to worry about.
Proper record keeping
A good business keeps good records. Proper planning, forecasting and budgeting will allow you to structure your salary and make investment decisions to grow your business. An accountant can help you with this, forecasting future cash flows, allowing you to plan around your income and run your business effectively. Once you know exactly where you stand, you can foresee any issues and address them proactively, rather than re-actively.
Small business owners often lack a pool of experienced people to discuss ideas and problems with. Whilst family members and friends are often happy to give an option, you really need to talk to people who know about business if the advice is to be helpful. A good accountant will not only take it upon themselves to get to know you and your business, they will use their experience to help you navigate tough decisions and act as a sounding board to sanity check your ideas.