Tax preparation is complicated stuff. Startup business owners already have enough tasks on their plates, and handling tax is not something interesting to do. A startup tax advisor provides suggestions on reducing tax amounts while complying with the law and regulations.
These financial professionals have advanced training and knowledge of tax accounting and tax laws at the local, state, and federal levels. Tax advisors do more than just crunch numbers; they plan taxes, identify what tax relief you are eligible for, comply with government regulations, add value to your business, and provide necessary recommendations on financial strategy.
We’ll read about finding the right tax provider for startups in the article.
How to find the right startup tax provider?
Startup Accountants choosing tax as their specialisation can also play the role of a tax advisor. They have detailed work experience handling corporate tax, National Insurance contributions, personal tax, income tax, international tax, VAT, and business rates.
Some of the day-to-day activities of a tax provider are:
- Meeting plans and discussing the financial situation
- Setting up meetings to gather information for calculating the due tax amount.
- Checking the tax return and completing them correctly.
- Auditing the clients’ tax records.
- Explaining tax laws and regulations to clients.
- Finding opportunities for clients to reduce their tax liability.
- Tax filing, submitting to HMRC and negotiating if needed on your behalf.
- Staying up-to-date with the tax legislation of the country.
Here are a few factors to consider before adding a tax provider.
A tax advisor doesn’t need to have a degree in particular subjects, but accountancy, accounts and finance, business and management, law, and maths are good. You can ask if they have a basic ATT or Association of Taxation Technicians qualification and whether they appeared or passed the Chartered Tax Accountant (CTA) examination.
The higher the educational qualification of an individual, the better the tax knowledge.
Ask your tax provider if they have previous experience working with your business type, size, funding stage, and business model. A business entity type can be a limited liability company, sole trader, partnership, corporation, etc. Having experience in similar companies means they have previous exposure to tax policies and can help you understand your opportunities to reduce tax legally.
Look into their soft skills.
Educational knowledge and experience may not be enough without gaining soft skills. You may ask them how they will answer your queries and check their communication skills. Or, give them a complex scenario, ask how they can take you out of that situation without harming your business, and see their problem-solving skills.
A tax provider must have excellent numeric skills, a logical and analytical mind, and an ability to interpret and explain complex regulations to clients. Additionally, they must gain negotiation skills, planning and organisation skills, time management, attention to detail, flexible approach to work, commercial awareness, tact, discretion, etc.
Here are a few basic questions you can ask tax providers before hiring them. And add some queries that you want to know from them.
- What are your credentials?
- Why did you choose a career in tax accounting?
- What are your previous experiences?
- What type of clients have they previously worked with?
- Can they help you in bookkeeping or basic accounting?
- Will they help you during the audit?
- Have they any experience in solving tax issues?
- What kind of accounting and tax software do they use?
- How do they stay up-to-date with tax laws and regulations?
You can also outsource your tax obligations to accounting firms like 123Financials. They work with a team of experts to provide you with the right solution, regardless of your company type, size, and other distinguishing factors.
Direct referrals are the best way to find the best startup tax advisors for your company. If you have someone close to business associates working in your industry, ask for a referral and ensure their capabilities related to tax matters.
If you can’t find a referral, do research and visit their websites. Arrange a face-to-face interview with them, clear all your queries, and reach out to clients to review testimonials on different platforms.
It is better to get a tax provider as soon as possible to stay stress-free at the end of the tax year. You cannot wait until the last minute to prepare your tax and mess up collecting all information.
With the right tax provider, everything will be easy, and you will be liable for the proper tax amount to the HMRC. Additionally, they will help you file the tax return by gathering all necessary details from the first day of the tax year, negotiating with the HMRC to reduce your tax burden according to your tax relief eligibility, and paying the tax.
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