Getting an accountant
For those that are self-employed, it is mandatory that they file annual tax returns in order to comply with the tax authorities in your local area. For those that reside in the UK, their employer will automatically adjust your earnings via the PAYE scheme and therefore you will not have to get an accountant.
However, not every country is the same and in some countries you will need to carry this task out yourself. Also, if it is the case that your employer does pay your tax directly out of your wages but you have a second freelance job, your employer will not be able to cover this for you. Instead, it will be you that will be responsible for making sure that you are paying the appropriate level of tax on the money that you earn.
Is it worthwhile getting an accountant?
Let us start with those that are solely self employed when answering this question. In this case, you could have a large number of incoming payments as well as a lot of outgoings. Depending on how well you are at book keeping, you may not need an accountant at all.
However if this is something that you especially lacklustre in, then the best case scenario will be to enlist the services of an accountant so that they can submit your end of your tax return for you. It will of cost you money to have them perform such a service, but it is better to make this investment than not do so and you end up paying too much tax (which can be hard to recoup) or pay too little, which could land you with a hefty tax bill.
For those that are employed by a company that pays the tax for you, but you do a small bit of work away from this, it is unlikely you would need an accountant to carry out paying the tax on this smaller sum for you.
It will be fairly easy for the tax agency to work out what little tax you need to pay them since you will already have a tax code showing what you’re eligible to pay in your main job. Likewise, if it is the case that you need to have a specific membership for your job, such as the GMC for doctors then you can claim the VAT back on this from the HMRC. This is done by simply inputting your details into an online form and in this regard you do not need an accountant to carry out this task.
What else will an accountant do?
When you enlist the services of an accountant, not only will they file your annual tax return, they will also carry out additional tasks subject to your requests. In the event that you previously underpaid a tax bill, perhaps when you filed your tax return by yourself, they will be able to assist you in looking over your assets to see if you truly have underpaid.
What the tax man says you owe and what you actually owe may actually be two different things since they will not have full access to your expenses needed to carry out your business. Rest assured, any qualified and reputable accountant will be able to smooth situations like this over. In the event that you do have to pay money back to the government, your accountant will try and make this repayment as small as possible, as well as the possibility of paying it back in instalments if this would be easier for you.
On the flipside, if you feel you have previously paid too much money in tax, your accountant will be able to go back through previous years’ worth of books and compare the figures to what you have paid to your local tax authority.
If they feel that you have indeed paid too much, they will be able to present these figures to said tax body in an attempt to make sure you get the refund that you deserve. Many accountants will also be able to suggest ways in which you are able to limit your tax bill each year, thereby increasing your bottom line and the amount in your bank account as a whole.
For many, an accountant is seen as in individual that helps companies. However, when the sad time comes that a love one has passed away and has left a substantial sum of money then an accountant can come in handy here. The amount of money that you are allowed to inherit before paying tax varies from country to country.
Having said that, your accountant will be able to look at the figures and based on what your annual income is, find ways to adjust how much of this inheritance you will be allowed to keep.
Bear in mind that whoever has left you the money has already paid tax over the years, and this inheritance is the proceeds of a job after tax has been paid. It is unfair that you should have to pay even more tax on top of this, especially when companies such as Google pay such paltry tax sums.
Finding your accountant
It is always advised that your account of choice is not only reputable but has previous experience in helping businesses and individuals in the more delicate areas of tax. In many accounting firms, there will also be access to a financial solicitor whereby any extremely intricate situations can be ironed out easily.
The internet has made it extremely easy to find accountant in just about every area. If you are unsure about the reputation of an accountancy firm then the easiest way is to do an actual search of their name. For example, typing ‘Sochall Smith Accountants’ into Google will bring up every hit in Google for that firm and their associations. Some people make the mistake of typing review in after the company name, but doing so could miss out vital information about the company that might sway your opinion on whether or not you should use them.