Accountant Vouchers Petition to Help Start-ups Get Books in Order
A proposal to give an Accountant Voucher to start-up businesses and the newly self-employed to spend in their first year of trading has been given the thumbs-up by business groups, writes Simon Wicks.
The scheme, launched as an e-petition on the Direct Gov site by accountant Elaine Clark, founder of Cheap Accounting, would see new businesses given a £300 voucher on registration with HM Revenue & Customs (HMRC).
This could be spent with an approved accountant to help fledgling businesses get their books in order from the outset and their first tax return filed correctly and on time. As reported recently, HMRC has imposed 850,000 penalties of £100 on self-employed people who failed to file their 2010/11 tax return on time.
“The world is moving into self-employment more and more, and I’ve seen so many start-ups and sole traders getting into a fix because of their tax and accounts,” said Clark. “Generally, we [accountants] get consulted after the problem has developed.”
“Part of the problem is that accounts don’t feel tangible when people become self-employed, unlike a website or business cards, because their first return is more than a year away,” she added. “Yet it’s a legal requirement. If they had the right support up front, they wouldn’t get themselves into a mess.”
Clark argued that the scheme, though potentially costly to set up, would pay for itself in time through saved HMRC administration costs, better business survival rates and more efficiently run businesses generating greater profits — and therefore paying more tax.
The Accountant Voucher scheme has already received the backing of Enterprise Nation, and both the Forum of Private Business (FPB) and the National Enterprise Network (NEN) have expressed support for the idea.
“It’s an interesting concept,”
said FPB spokesman Robert Downes.
“As any small-business owner will testify, HMRC’s tax returns are notoriously complex to complete. So free, professional assistance in the all-important first year of a fledgling business would be welcomed by most start-ups.”
NEN chief executive Dawn Whiteley said:
“It’s a good, practical idea. But rather than it being a fixed price, it could be for a fixed amount of time or a fixed list of services. If you can get your records right at the beginning, it’s so much easier to keep on the right track from then on.”
However, Accountancy Age editor Kevin Reed raised objections to the idea, writing in an editorial that he doubted many accountants themselves would be prepared to offer the ‘free’ support.
“There will be some accountants that will get little value from some of these voucher-touting clients. In such circumstances you’ll end up with a disgruntled accountant, and ex-clients unimpressed with the service they’re provided.”
HMRC declined to comment on the proposal.