Should you have a Chartered Accountant or Accountant

This is a common question people ask when they are either setting up their own business or if they need to submit a self assessment/tax return.

First lets discuss the difference between a Chartered Accountant and an Accountant

The key difference between an accountant and a chartered accountant is that the latter is typically more highly qualified and experienced, and will be a member of a professional body.

A chartered accountant can offer specialist accountancy services and business advice in a range of important areas.

If you’re seeking straightforward accounting services, you may not need to pay the extra cost of hiring a chartered accountant – but if your needs are more complex or specialised, they may be well worth the higher fee.

What is a chartered accountant?

A chartered accountant is an accountant with the specific professionally accreditation of ‘chartered status’.

They have studied accounting to a high level and have gained professional experience in the industry.

In addition, chartered accountants are members of a respected professional body, such as CIMA (Chartered Institute of Management Accountants) and are required to stick to a strict ethical and professional code of conduct.

What does a chartered accountant do?

In addition to regular accounting services, chartered accountants can provide advice on specific business and financial matters.

These include:

• Corporate finance e.g. securing finance for mergers, acquisitions and capital restructuring

• Financial management within a business, such as in-depth cash flow forecasting or managing funds

• Personal financial advice (for both individuals and companies)

• Forensic accounting to support litigation into commercial fraud

Due to their in-depth expertise, many chartered accountants can advise on things that regular accountants can’t.

They often have specialised experience in a certain field, such as working with High Net Worth Individuals with more complicated personal finances or estates or testifying as accountancy experts in criminal cases.

When do I need a chartered accountant?

General accountants can offer sound advice on everyday matters such as annual tax returns and invoicing.

Enlisting the pricier services of a chartered accountant isn’t necessary if you’ve got a question about VAT, for example. However, it’s best to speak to a chartered accountant if you’re in a more complex financial situation and need specialist advice.

For example, if you run a business and you’re looking to acquire a smaller company, a chartered accountant will help you make a detailed financial plan ahead of the acquisition.

They will guide you through the whole process, including how to secure any necessary funding and offer advice on proceeding in a tax efficient way.

Depending on their previous experience, chartered accountants can have in-depth knowledge of a wide range of financial matters, from tax planning to cash flow forecasting.

Though all are trained to a high standard, finding a chartered accountant that specialises in a particular field will help you get the best result.

How much does a chartered accountant cost?

The fee charged by a chartered accountant will be determined by a number of factors, including:

• Your annual turnover

• How many employees you have

• How regularly you need to use their services

• How complex the matter is

Regardless of your requirements, chartered accountants are more expensive than accountants.

While an accountant will usually charge between £25 to £35 per hour for basic accounting services, specialist tax planning or business planning advice from a chartered accountant could cost up to £150 per hour.