WHO NEEDS AN ACCOUNTANT TO DO THEIR SELF-ASSESSMENT RETURN ANYWAY?
When I first started as an Accountant, self-assessment was about to be introduced. Accountants feared the worst. Would everyone now do their own tax returns causing a huge hole in their income stream?
Well, fear not. In the early days self-assessment proved to be far more complicated than was made out. Most returns (possibly all?) had to be completed on paper, and many accountants were baffled, let alone the self-employed community.
I remember my first training course on the new system. We were given a dummy tax return to complete and HMRC’s tax calculator (paper one) to work out the tax due. In a room of nearly 50 accountants only 2 got the calculation right, and I’m not saying whether I was one of them!
So, accountants were safe for now. The difficulties with having non-31st March (or 5th April) year ends and first years of trading, basis periods and the way payments on account worked proved too much for most and the accountant was still needed. I kept my job, tax remained ridiculously complicated, and all was right with the world.
Jump forward to now and it is extremely rare for a paper tax return to be filed. Indeed HMRC make it more and more difficult to do so. Bookkeeping software claims it can do it all for you and there is HMRC’s online tax return completion that calculates the tax. Surely there is no need for an accountant now, isn’t that just a waste of money?
Is The Accountant Dead...?
It’s true that you don’t need to have knowledge of the tax system to fill in a tax return, and as long as HMRC accept it, the tax liability is calculated for you – job done... Or is it?
For a start you can pretty much put in any figures you want, nothing will tell you whether they are right or wrong. How do you know whether you have completed it correctly, have you claimed everything you can and, just as importantly, have you claimed things that you should not?
There is a common question amongst small business owners – ‘why does HMRC always crack down hard on the little guy when big business gets away with it?’
That may not be entirely true, however because of the sums involved it is worth these big businesses paying huge amounts of money to their legal representatives to tie HMRC in knots. A small business owner cannot do this.
Taking time out of your business to complete your tax return may seem like a cost saving, but couldn’t that time be put to better use? Generating more business, completing your jobs on time and not having the stress of putting all those figures together.
Long Live The Accountant!
HMRC conduct regular enquiries into businesses of all sizes. These can be random or triggered by an event. HMRC now have very sophisticated software and algorithms to weed out the tax returns they want to look at. Late returns or failure to pay on time can also increase their wariness and push you up the enquiries list.
Being the recipient of an enquiry letter from HMRC is worrying enough for anybody, even those who know (or think) they have done everything correctly. If you are not even sure of that then an enquiry is often bad news. It could end up being the first time you have been told that your tax return was wrong.
HMRC have a strong policy on penalties for tax return errors, even stronger where they have discovered the error themselves. Fines start at £100 and can be as high as 100% of the tax due plus interest. Your excuse must be better than good – and ignorance of the rules is not one they will accept.
Is It Worth The Risk?
Ask yourself these questions:
- Do I know if I am paying the right amount of tax?
- Am I confident my return could stand up to an HMRC investigation?
- Am I claiming for everything I can?
- Are there any exemptions that I may qualify for?
- Do I understand the payments on account scheme?
- Is doing my own return making the best use of my time?
If the answer to these is either ‘I don’t know’ or ‘no’ then I can help you.
A Self-Assessment Service To Help You
As a qualified accountant with over 25 years experience, numbers are my thing, repairing cars, for example, is not. I wouldn’t waste hours of my time trying to fix my car, when a mechanic can do it so much quicker and would fix it properly. I can spend that time earning the money to pay the mechanic. Less stress, better outcome, simple.
That’s why I provide a full self-assessment return service for total peace of mind.
However, if you are self-employed or have a small property portfolio and you complete your own self-assessment return, my self-assessment checking service is designed to give you some peace of mind, and I will make sure you are claiming for everything you can in order to minimise your tax liability.
For full details and prices please follow this link to my self-assessment page. You can also download my 10 Top Tax Tips for Self-Assessment to help you minimise your tax liability and stay best friends with the taxman.
