Do You Need An Accountant For Your Tax Return?

Do You Need An Accountant For Your Tax Return?

There's no legal requirement to use an accountant, but there are benefits to getting professional help if you're unfamiliar with the world of tax - for example, using an accountant can give you peace of mind that you're not making any mistakes on your tax return.

It’s no secret that taxes can be confusing, but it depends on the complexity of your tax affairs. For relatively simple tax returns, you may find more value in looking at HMRC’s guidance notes which are designed to help people (and accountants) prepare Self Assessment tax returns accurately. If you want to prepare your own return, you should set up a Government Gateway account and you should also be comfortable with the return filing process. You should be aware of how and when to file as well as know what tax to pay. 

Taxpayers should think about appointing an accountant when their tax affairs are more complex. Examples might include self-employed traders, people with rental income who are not sure what expenses to claim, or how the new loan interest rules should be applied. People who are selling assets or shares in a company should especially think about speaking to an agent as the rules on capital gains tax can be quite complex, and people who make a loss from their self-employment and wish to set this against other taxable income, or carry back losses to offset profits in earlier years should also think about speaking to an accountant.

Basic Tax Return Mistakes People Should Avoid

Now that we are fast approaching the 31^st of January 2023 Self Assessment deadline for submitting the 2021/22 tax returns, it may be worth giving some thought to some of the basic tax return mistakes that people should avoid:

1. Don’t leave everything to the last minute. Allow yourself enough time to complete the return and get in the right mindset. Completing your Self Assessment tax return can seem like a chore at the best of times, and it is tempting to think of “January” as the time that you will get around to it. The trouble with this is January arrives and then a few days are lost to the new year. Then you’re catching up at work after the Christmas holidays and, all of a sudden, there’s only two weeks left. Panic sets in when you realise you haven’t kept all your tax vouchers in one place and you suddenly have to speak to your HR department to get a copy of your P60 and P11D. I would recommend that you start thinking about your tax return much earlier - maybe even as early as July or August so that you can collate your documents and complete your return with plenty of time to spare.
2. Keep your records in one place. If you have to complete a Self Assessment return, then you may well have PAYE income and (possibly) benefits in kind from your employer (company car, healthcare, gym membership, etc). Your employer will give you a P60 and a P11D if you receive any taxable benefits. You might also have vouchers or certificates in respect of charitable Gift-aid donations, qualifying loan interest payments, pension income or dividends. I would recommend that you file everything together so that everything is easily accessible when the time comes to start work on your return.
3. If this is your first return and you do not use an accountant, make sure you are registered for Self Assessment. If you intend on filing your return electronically, then you should also ensure that you are set up on the Government Gateway. If you have appointed an accountant, then it is probable that they will take care of the tax registration and return filing for you, but if you’re doing this yourself, then allow two or three months for HMRC to process your requests.
4. If you do use an accountant, then you should give them enough time to process your return and check it. No accountant likes to receive their client’s tax return information at the eleventh hour - and why should they? Your accountant will want the time to check the return to make sure they have received all information, and they will want to give you adequate time to check the return to make sure it’s complete. Speaking from experience, it is very hard to do this when a client sends you their records on the 31^st of January, and I know of many firms (including Raffingers) that have a cut-off date much earlier in January when we simply do not guarantee to complete a return if the information is provided late. It might sound like a tough approach but, over the years, almost all of our clients have been converted and the majority of our returns are completed by early January.
5. Remember to make provision for your tax payment which will become due at the end of January. If this is your first Self Assessment return, it is possible that your January tax bill will be larger than expected because you may be required to make payments on account of the following year's tax liability. The payments on account are due in January and July each year which can mean that the first January payment under Self Assessment can be much larger than you were expecting.
6. Remember that you are entitled to reduce the payments on account if you don’t think that your tax liability for next year is going to be as high as the current year. Be careful not to over-reduce your payments though, as HMRC will charge you late payment interest.
7. Finally, please remember to take professional advice if you are unsure about how to complete your tax return or what to include.

If you have any questions about your tax return or any other questions, please don't hesitate to email me at neill.staff@rafifngers.co.uk or click here to get in touch with us.