Accountants and solicitors

An accountant is a qualified professional who keeps an enterprise in control of its money and its financial paperwork. A solicitor is a qualified legal professional who makes sure the enterprise acts lawfully. Both are professional, paid support, not capital, and most limited companies use an accountant.

Accountants

Accountants keep control of the finances and prepare the statutory end-of-year accounts that certain businesses must legally produce. They also handle tax returns and other statutory returns, and keep the financial records, so the owner knows what the business earns, owes and must pay to HMRC.

• Advantages: advice is qualified, impartial and up to date because tax rules change often. Correct returns avoid penalties, and spotting costs that can be claimed against tax can save more than the fees.
• Disadvantages: fees are expensive for a new enterprise with little spare cash, and a business with simple records may not get value for money.

Solicitors

Solicitors give legal advice on matters such as contracts and employment law, for example checking a lease or drawing up a contract of employment, so the enterprise acts lawfully.

• Advantages: they are qualified, and confidentiality rules let you share sensitive details safely. Their training makes advice knowledgeable, trustworthy, up to date and unbiased.
• Disadvantages: they usually charge by the hour, so they are expensive, and must be experienced in the right area of law. A family law specialist is not the right person to check a commercial contract.

Matching support to the need

For example, three friends who run a dog-grooming salon as a limited company pay an accountant to file the end-of-year accounts and tax return, and a solicitor to check the lease on a second salon and write a contract of employment for a new groomer. Paying the wrong professional wastes money: a solicitor cannot file your tax return, and an accountant cannot settle a legal dispute.