Do you need an accountant to file your tax return?

A businesswoman files her business accounts

Is it fair to say that tax isn't your strongest suit? It's a common complaint. Business owners often aren't sure which aspects of their tax responsibilities they can handle themselves, and when they're better off calling in the professionals

The self assessment tax return is a classic case in point. Technically, you can do it yourself - but some would argue that leaving it to an accountant is a better idea.

These days, however, clever tech can help you confidently handle your obligations yourself - so a financial professional may not be the best use of your money.

How tax self assessment works

Self assessment tax returns must be completed once a year by either 31 October (for paper returns) or 31 January (online returns). Your return declares how much taxable income you've earned in that financial year and lists any expenses or reliefs you may be eligible to claim.

Under the Making Tax Digital initiative, which is currently being phased in, annual returns will be replaced by quarterly updates. You'll need an online HMRC account for this purpose.

Tax returns require close attention to detail. You must provide accurate dates, figures, and details of any marital or special relief statuses you are eligible for. Whatever you declare, you should be prepared to back up your claims with evidence (such as invoices and receipts) if requested by HMRC.

Submitting inaccurate information carries a financial penalty, as does missing your filing deadline - and fines will increase the longer you put off rectifying the situation.

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How a tax accountant can help

Business accountants bring significant expertise to the table. They deal with numbers every day, so they're very good at ensuring all your figures add up. But more than that, they know the rules: what you're entitled to, and how your liabilities might be reduced.

The fee for an accountant to complete a straightforward self assessment tax return is typically around £250 for a reputable firm. It will be less if you only require a very basic service and you can expect to pay more if you have more complicated affairs.

Using an accountant saves stress on your part, but, perhaps more importantly, it also saves time. £250 may feel quite reasonable when you consider the several hours you might otherwise spend completing your tax return yourself.

Other options for filing your tax return

However justifiable the accountant's fee, some small businesses or freelancers simply do not have the cash to spare. Added to this, human error is still a risk. As good as any accountant is, they can still make mistakes and you may be the unfortunate victim of an oversight - and you will be liable.

Many people are put off completing their own tax returns due to the pressure of getting figures exactly right. This, coupled with a lack of financial confidence, is what puts people off doing it themselves. But in truth, anyone can file an accurate tax return without professional help.

One alternative is to use tax software that adds up your income and expenses over the financial year. As long as you input your figures carefully, your calculations will be 100% error-free. These tools are very affordable and reduce your tax return burden to a single click on deadline. Some small business bank account providers provide free accounting tools to account holders.

Otherwise, you can always do your own return with the help of spreadsheets, calculators and good book-keeping. It's not as simple as using dedicated tax and accounting software, but it's certainly achievable if you're organised and have a head for figures.

Either way, remember that accountants are not a necessity when filing your self assessment tax return. It's more about finding a solution that works for you.

Copyright © 2019 Mike Parkes of GoSimpleTax, providers of tax return software that can help you manage your self-assessment tax return. Sign up for a free.

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