Online Tax Return – Do your own or find an accountant?
Doing your own online tax return is obviously the cheap option compared to finding your own accountant to do it for you. However, is it cheaper in the long run?
Have you claimed everything?
If your tax affairs are very straight forward, it could make sense to do your own online tax return. But if you have anything more complicated like self employment or property income, how do you know you are claiming everything you can? For example, if you do any work at home such as the paperwork, you could be entitled to claim a proportion of certain household bills. Higher rate tax payers would only need to claim additional costs of about £300 to cover the cost of a competitively priced accountant. A qualified accountant has a duty to take steps to ensure you pay the correct amount of tax, including claiming any expenses and allowances that are legitimately deductible.
Have you claimed too much, or not declared enough?
If you get your own online tax return wrong, even if the mistake is an honest one, there could be financial consequences. The penalties charged depend on the severity, starting from up to 30% of the additional tax due for a lack of reasonable care, going up to 70% for deliberate errors. So a lack of care resulting in an underpayment of tax of £400 could cost you more than an accountant.
Will your Online Tax Return be on time?
We all know what a chore it can be to dig out all of your paperwork and complete your tax return. That’s why so many leave it until the last minute, or even file it late (apparently 850,000 of us last year!). Filing late by just 1 day will cost you £100, which increases by a daily £10 if filed more than 3 months late.
Find an accountant?
As well as helping to prevent all of the above, an accountant can identify other ways of saving tax that many people doing their own online tax return wouldn’t have heard of, such as obtaining tax relief by investing spare cash in a Seed Enterprise Investment Scheme.