If you receive any other income on a regular basis apart from what you earn in your day job (such as pensions, royalties and so forth), or you work for people in a self-employed capacity, then you will almost certainly be having to file a tax return each year.
This ritualistic annual task usually involves you having to sift through loads of paperwork such as receipts and invoices, and spending ages answering all manner of questions on the HMRC website (or worse, on a paper-based tax return).
But should you instead be using an accountant to file your tax return on your behalf? Here are the pros and cons of doing so.
Unless you personally are a certified accountant, you will not know of any legal ways that you can save money on your taxes when it comes to filing your tax return with HMRC. There is a reason why accountants spend many years training for their profession, and that is because they are taught to know the tax laws of Britain like the back of their hand!
You, on the other hand, will only have a limited knowledge of ensuring that your affairs remain as tax efficient as possible, and you could quite possibly end up paying out more in taxes than you would in accountancy fees!
As I mentioned a moment ago, the process of preparing to file your tax return each year involves you having to organise all of the previous tax year’s paperwork; so that means you will need to have all of your invoices, receipts and expenses in order, as well as ensuring that you have any paperwork to back up purchases or expenses.
This can usually be a task in itself, but then this seemingly time-consuming task suddenly feels like a walk in the park when you discover that you have a whole host of questions to answer in your tax return!
The format of these questions tends to change on a yearly basis, and because you have to virtually guarantee that everything you state in your tax return is true (to the best of your knowledge), this can sometimes lead you to making mistakes in your tax return.
However, if you simply handed over all of your paperwork to an accountant, they can go through it with a fine tooth comb and flag up any erroneous entries before filing your tax return on your behalf.
Whilst it is true that accountants aren’t exactly cheap when it comes to preparing and filing your tax returns, it should be noted that in many cases the tax savings you make will be vastly greater than the accountancy fees that you would have to pay.
And then there is also the point that spending time sorting out your tax return (especially if you have complex tax affairs) means that you won’t be earning money during this period of time.
A highly experienced accountant in Warrington, or indeed any other part of Britain, will make light work of your tax return, freeing up your time to concentrate on your business or full time job, and more importantly, continue making money!