Would I benefit from getting an accountant?

[FLD]

Hi Everyone,

I would be really grateful for some advice on my tax return / getting an accountant.

Some background info…
I am a mature student and a self employed small trader. I have started a couple of businesses in the last 12 months (both as a sole trader, just doing completely different things).

I have kept receipts, filed them and given them a reference number and put all my expenses and income on a spreadsheet etc so it won’t be just a bin bag full of receipts . I can also upload all this to my accounts software (do$h) to give a summary for the year, if required. I only have a very small turnover (under 20k) and am not VAT registered.


I have 2 questions

1, Would I benefit from getting an accountant to do my tax return? The biggest problem for me is working out if there is anything else I could/should be claiming for. Would an accountant give me a list of things which I may have missed? I one advantage of having an accountant is that they pay for themselves in the money they save you, but what puzzles me is how they know what I have not claimed for.

2, I will be submitting a loss (due to start up costs) for the first year. I understand that you can offset the loss against future profits, is this correct. If this is correct, then is this done by the Inland Revenue automatically or is this an excellent example of the need for an accountant?

Thanks in advance, I hope this is clear. I have seen all the helpful posts on here and I know you all know your stuff.

 

[KM-Tiger]

.... but what puzzles me is how they know what I have not claimed for...

By asking you many questions about the nature of your business. Use of home as an office for instance, not huge at £3/week, but something. And Capital Allowances.

My experience over many years is that employing an accountant will return a profit, maybe not in the first year, but if you expand then success will be rewarded with bigger tax bills, unless someone is fighting your corner.

 

[FLD]

Thanks KM-Tiger, it sounds like it could be a good idea to get one as I do work from home but am not claiming for use of home for business.

 

[elaine@cheapaccounting]

Of course I would say get an accountant but seriously if you need to ask if you need one - then you probably do

 

[FLD]

Thanks for that Elaine. I have had a look at the links, lots of good info!

Out of interest can anyone give me an idea of how much I should be looking to pay per month/year for an accountant, bearing in mind the size of my business (see my original post).

 

[iridessa]

I think with anything like this eg. accounts, legal matters etc. you can certainly do a lot of the work yourself.

The danger is the "little knowledge is a dangerous thing" . So I would always run things via an accountant as you may be 99% there but be missing the one crucial bit of knowledge that could cost you a lot of money or lose you a lot of money!

For this reason I would always recommend taking professional advice.

 

[bwglaw]

The question is, would you benefit in NOT having an Accountant.

Quite rightly so, as Elaine says, if you are asking questions, then you do need professional advice. As your business grows you will no doubt need one.

Some matters may seem easier to an experienced business person. The thing is, if you attempt to do thing yourself whilst the process may seem easy to you, the cost of rectifying a situation would cost far more. Its false economy.

 

[Geoff T]

I'm no beanie, but the answer to the question in your header on the OP is "YES"

Didn't bother with the rest of the post, but just skim reading other posts, they seem to prove the above statement is correct...

Job done... 'owt else?

(If you can't see why - talk to someone who will explain why it is so)

 

[elaine@cheapaccounting]

Thanks for that Elaine. I have had a look at the links, lots of good info!

Out of interest can anyone give me an idea of how much I should be looking to pay per month/year for an accountant, bearing in mind the size of my business (see my original post).

No standard fee - have a look a the sticky on how to select an accountant and of course check out our fees!!!

 

[taxattack]

Hi Everyone,

I have 2 questions

1, Would I benefit from getting an accountant to do my tax return? The biggest problem for me is working out if there is anything else I could/should be claiming for. Would an accountant give me a list of things which I may have missed? I one advantage of having an accountant is that they pay for themselves in the money they save you, but what puzzles me is how they know what I have not claimed for.

2, I will be submitting a loss (due to start up costs) for the first year. I understand that you can offset the loss against future profits, is this correct. If this is correct, then is this done by the Inland Revenue automatically or is this an excellent example of the need for an accountant?

Thanks in advance, I hope this is clear. I have seen all the helpful posts on here and I know you all know your stuff.

Losses can be offset against future profits of the same trade. They can also be set against other income of the same or the previous tax year, or, for the first 4 years of new trades, against other income for the previous 3 tax years. In addition, there is a temporary rule for all sole traders allowing carry back for 3 years, which may sound the same as "the new trader" rule, but actually works in a different way, and may be more useful. Then there is the rule for carry back of losses if you were to terminate one (or both) of the businesses.

There is a lot of choice here, and the best option will depend in part on preserving personal allowances for the relevant years, use of capital allowances, your choice of year end, and the future income from each trade. Claims must be made for your choice of loss relief - they are not automatic.

I know that's a rather compressed explanation, but in short, I would suggest that an accountant could be useful!

Chris

 

[Thermostat]

Yes We need accountants
The first one did not believe my stock & work in progress figures. Brought his staff into my office. Spent 8 days going thru it all then Stated "I agree with your figure now." his bill was double.
2nd Accountant- Had a great year then following year in the 1992 reccession made a vast loss. On the stage of Bankruptcy and in desperation I phone the Tax office. Was I owed any back tax The reply £XXXXX WHAT !! The guy said "your accountant said you wanted next year! Send a letter and we will pay it.
Shall I go on?

 

[Zeno]

Shall I go on?

Please do. I would love to know how you have got on with your filing requirements, tax returns etc since 1992.

 

[Thermostat]

I did them myself
They were checked and checked again by the Tax man
As the Tax Man said "Yes you can do them yourself"

 

[Zeno]

I did them myself
They were checked and checked again by the Tax man
As the Tax Man said "Yes you can do them yourself"

I assume you are a sole trader. You realise that since self assesment in 1996 your returns are not really checked, just accepted?

Each to their own. I had a bad experience with a doctor and rubber glove but I does not mean I think I can do without the medical profession.

I bet you would be surprised what a good accountant like Elaine could do for you.

 

[Thermostat]

I agree, I was just having a little "rant" about the past. Like the Bank Manager who said he could sort a missing bank statement for the accountant (a favour !?) No he charged me £20 but had not the heart to tell me . Poor man.

I have been looking at Elaines posts etc. Hand on my heart, I was thinking of contacting her Accounts Company cos I have been thinking of starting a Limited Company and bringing in my sole trader setup

So you never know, PLC maybe
ps I have a relative that works in the self assessment dept, so I knew about 1996
(probably before you)