You don’t need an accountant for self assessment
What is the self assessment tax return?
Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax. Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return. If you need to send one, you fill it in after the end of the tax year (5 April) it applies to. The deadline for submission of your tax return is 31st January the following year – almost 10 months later.
Once you’ve entered all of your income, as in paye income from a job, bank interest, any self employment income etc. The self assessment then calculates a tax due figure and then you can go through your online banking to make a payment. Simple.
So, why use an accountant?
HMRC Tax Return guidance is over 1,000 pages!
The guidance on HMRC Self Assessment comprises of 64 sections and each section averages 17 pages, so that would be about 1,088 pages of tax guidance. Do you really want to spend your quality time with this light bedtime reading? Check it out if you can’t sleep at night <<here>>
Are you claiming everything that you are entitled to?
HMRC won’t be breaking down your door to tell you what you can claim back and finding out what you can claim is like looking for a needle in a haystack. Seriously, try and Google allowable deductions and see how many different results come up. It’s not just self employed people that can claim back taxable expenses, did you know that certain employees can claim money back for washing their own uniforms? As an added bonus, the amount you pay an accountant is an allowable deduction of your tax return.
How long do I have to keep records for?
This is debatable, according to HMRC there are a few answers…. See tax doesn’t have to bill taxing. If your self assessment if submitted on or before the tax return deadline, you should keep your records for at least 22 months after the end of the tax year the tax return is for. However, tax returns submitted after the deadline then records should be kept for at least 15 months after you sent the tax return. Simple right? But then there’s another option.
If you have business records, you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. This applies to sole traders and partnerships.
Do you have space to store your business finance records for 5 years minimum? This is an area that accountants can help, we have secure facilities to either store hard copies or it is becoming increasingly popular to securely store data online.
What’s the worst that can happen?
There are no rules on how you must keep records. You can keep them on paper, digitally or as part of a software program (like Xero software). We encourage the use of cloud software because HMRC can charge you a penalty if your records aren’t accurate, complete and readable. The same applies if your records are lost, stolen or destroyed. There’s no guidance on what this penalty may be, so read into that what you may but it’ll be more than just a tickle.
Late submission of tax return. That’ll cost you a self assessment fine of £100 the moment the clock strike 0:01 on the 1st February, plus there are daily penalties and HMRC will charge you interest on any under paid tax.
So, while it’s true that you don’t need an accountant to complete your self assessment there are many benefits.
Honey Bee Accountancy
Carl Ford is the founder of Honey Bee Accountancy. Carl has extension knowledge of the retail and recruitment sectors which is utilised to help grow successful businesses for the clients of Honey Bee Accountancy.