Why hire a specialist accountant to complete your yearly tax return?
The problem of managing taxes is crucial to your personal financial success from budgeting, accounting and the dreaded tax return whether it is a self-assessment tax return for the self-employed or annual accounts & tax return for limited companies. A personal tax accountant can make the whole process much more manageable with up-to-date knowledge of the changing tax world and how it may affect you, and if everything is submitted to the accountant online, escape late penalties etc.
A proactive approach to the tax return process can help avoid surprises as accountants like to get tax returns done early in the filing period (always check spam as that is where tax-related emails tend to end up), and you get to know your liabilities early enough to make arrangements in how to pay.
But there are plenty of other reasons to use an accountant.
1. Time-saving: Unless you are utilising apps regularly, you often spend hours or days trying to get your tax data up-to-date for the year, and many people sometimes leave it too late and are then tied up with a mahoosive amount of work. The use of an app and installation of good habits can be put into play if you connect to your accountant, as they can nudge you in the right direction. As a self-employed person, time is one of your most valuable resources. The complexities of the UK tax system can make tax return filing a time-consuming process, which takes you away from your core business tasks. It is also possible of course you hand all the day-to-day stuff to the accountant so saving you time. Of course, that takes money so it is a time v money situation.
2. Expert in tax law: General tax law can be complicated enough, but all the changes that take place mean you have to be in the know if you go it alone. Professionally qualified accountants have to undertake professional development and update courses each year in order to keep their certification and to operate as a qualified accountant. This way, they can offer you the correct advice at the time to minimise your tax liability. But beware, if you have been doing your tax return incorrectly in the past and you get an accountant that knows the rules and corrects you going forward, it can cost you more than just their fee. Equally though, you may not have been claiming for things you could claim for, so they will then save you money.
3. Peace of mind: That’s nice (sorry – just channelling Mrs Brown). Knowing that a professional is handling your taxes can provide considerable peace of mind. You can rest assured knowing your tax affairs are in order if submitted to the accountant in plenty of time, you’re compliant with the latest laws and regulations, and you’re optimising your tax position. An accountant can ensure you understand and meet your self-assessment obligations, which can be particularly useful if you’re new to being self-employed.
4. Filing on time with accuracy: A familiar theme here – if you get your data to the accountant when they request it, it will ensure that there is plenty of time to work through the data carefully and give time to file so you can save up for it. There is no point in handing your data over in December/January and expecting everything to be perfect and filled so you don’t get late penalties. If you complete a checklist provided by the accountant, then it is highly possible that everything will be available at the same time and not have to waste energy, time and money having to keep re-starting the work.
5. Awareness of VAT: Although you are responsible for accurate accounting records, you need to keep an eye on your fee income/turnover as to whether you should be registered for VAT (UK fee income/turnover over £85K in a rolling 12-month period). Handing everything over to an accountant near the end of the filing period may show that you should have been VAT registered months ago and that can unearth a whole host of pain. I you are running close to that level, it may be worthwhile engaging an accountant to keep an eye on everything and give you advance warning of the situation.
6. Possible financial advice: I don’t really want to put this one on the list as most accountants are not qualified to offer actual financial advice in terms of pensions, investments, mortgages etc, but they can make you aware of using things like pension contributions and the effect on your tax return, and general money management advice for self-employment and director owned companies.
7. Support with HMRC investigations: Heaven forbid this happens, but in the event of an investigation by HMRC, having an accountant can be invaluable as they can help you navigate the process and prepare the necessary documents required. If you are a member of one of the performance unions, your membership may pay for accountants fees for this and representation.
So that takes into account why you would hire an accountant, but surely all accountants are the same?
So why hire a specialist in the music, arts and entertainment industry?
It is simple in that a specialist accountant will know the ins and outs and the peculiarities that may exist eg subsistence, clothing, grooming etc. Two key areas that a specialist can help you with are capital allowances, especially on instruments and overseas tax deductions.
As a self-employed individual or a director of your own limited company, having an expert accountant in your corner can save you time, money, and stress, making it a smart business investment.