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Do I need an accountant for a tax return?

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Do I need an accountant for a tax return?

All businesses and self-employed people are required to submit tax returns to HMRC. These returns calculate your profits, and what tax is payable against them. For many business owners, using an account takes the stress out of filing their returns, and typically costs around £200-£300.

What Types of Tax Return are there?

You will be required to submit a tax return if you have any of the below businesses or trading statuses:

  • Self-employed
  • Partnership
  • Trust
  • Company
  • PAYE employer
  • VAT registered

These returns do not all declare the same type of tax; self-employed people need to submit a return to pay income tax against. VAT returns must be filed by VAT registered businesses to pay back any residual input VAT remaining after output VAT has been deducted.

PAYE returns are required to show what tax and national insurance deductions have been taken from employee's pay through payroll, and therefore what is payable to the revenue. Learn more about how much it costs to outsource payroll.

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How Much Does it Cost for an Accountant to File my Tax Returns?

The cost of an accountant preparing and filing your returns depends on several factors. For example, how complex your business is, how detailed your records are, and how quickly your return needs to be submitted.

The typical cost for a self-employed tax return to be submitted is around £200-£300 as an example.

If you need to file regular returns, such as a quarterly VAT return, you might work with your accountant more often. The typical monthly cost for a UK accountant for a small business is £50-£150.

If you're looking into greater financial assistance or advice beyond tax returns, take a look at financial advisor cost factors and wealth manager costs so you can make an informed decision.

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Why Use an Accountant to File my Tax Return?

One of the most common reasons to choose to use an accountant is saving the time and stress involved in calculating a tax return. Some larger businesses may have an in-house accountant or finance team, but most self-employed people will be sole traders.

Benefits of choosing to use an accountant to file your tax returns include:

  • Assurance that returns have been filed accurately and on time.
  • Help with understanding what can be claimed, what cannot, and the most tax-efficient way to treat transactions such as sales of assets.
  • Saving the cost of needing to purchase HMRC compatible software.
  • Time savings in collating figures, working through calculations and dealing with any queries.
  • Having a professional accountant to act as your tax agent and liaise directly with HMRC on your behalf.

Why Use an Accountant to File my Tax Return?

While the average cost of filing a self-employed tax return is around £200-£300, there are lots of different types of return you might need to submit.

Annual returns are usually a one-off at the end of the financial year or tax year, but other returns are required monthly or quarterly.

The cost of managing your returns will depend on lots of factors:

  1. Whether you have all your figures and bookkeeping up to date, or whether your accountant will need to work through records and paperwork to calculate trading figures.
  2. Your trading status and filing history - such as whether there are previous transactions or factors required to be brought forward.
  3. The timescales. If you are late filing your returns or are very close to the deadline, you may need to pay a higher fee for an expedited service.
  4. How complicated your figures and trading structures are. For example, if you have several different sites or business sectors, your charges may be higher as it will take more work to calculate your returns accurately.

Find out more about small business accounting costs.


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Frequently Asked Questions

Do I Have to Use an Accountant for my Tax Returns?

No, there is no requirement to use an accountant! If you are confident in calculating your returns, or your trading figures are straightforward, there is no reason you cannot calculate and submit your returns.

However, you may need to purchase bookkeeping or accountancy software to file some types of return.

Remember that when you file your return, you will need to verify that all the figures and information you have provided are true and accurate, so it is wise to ensure you have a comprehensive understanding of the filing forms before submitting.

Can I Use an Online Filing Service for Tax Returns?

There are lots of options for filing your returns:

  • Filing yourself.
  • Using a traditional accountant.
  • Hiring a virtual accountant.
  • Contracting a freelance accountant.
  • Using an online filing service.

Virtual accountants are usually very similar to traditional practises, but provide all of their services remotely. Freelance accountants are qualified accountants who work independently outside of a practice.

Online filing services are often the cheapest option, but you should be aware that the cost is simply for using their software to file your return. This will usually not include any advice or calculations - you will need to provide finished figures, and the filing service will submit them to HMRC on your behalf without any revisions.

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