What does a tax accountant do?
Most small business owners don't particularly like accounting or bookkeeping, it’s not why they started their business journey but they wind up doing it on the weekends or in the small hours of the morning when they would rather be with their loved ones. However, they continue because they have a DIY mentality and believe that paying for assistance is an extravagance. Why not work a bit later and handle the books yourself, after all? Then tax time coomes around and everyone gets worried about their self-assessment tax returns in January. But consider if you had someone monitoring your finances throughout the whole year, not just in January, to ensure that you kept more of your earnings and reduced the tax liability on them, wouldn’t that be a benefit? Well these people do exist and we call them a Tax Accountant!
Every penny counts when you work for yourself or own a small business, and keeping track of where they are all coming from or going is a full-time job in and of itself. Give yourself a break and give all these tasks to a Tax Accountant, they are professional number crunchers, not you.
Here are 5 compelling reasons for you to relinquish control and let a Tax Accountant handle your numbers…
A Tax Accountant will help you save time
The documentation requirements might be time-consuming and detract from the task at hand (the one that you actually want to do). Hiring an accountant who is up to speed on the most recent tax laws, deadlines, and rules—not to mention one who fully comprehends the format that HMRC demands all the information in—can save you a tonne of time.
A Tax Accountant will lessen your tax obligation
A competent tax accountant will be proactive rather than reactive, know how to save you money, and be able to offer you sound advise on how to operate your company in the most tax-efficient manner. Based on your unique situation and circumstances, they will advise you on the best method to run your business, whether it be as a limited company or as a self-employed individual. They will also show you how to withdraw money from your company in the most tax-efficient manner. They will discuss paying yourself profits, knowing what business expenditures you can and cannot claim, and the advantages of the flat rate VAT policy.
A Tax Accountant will avert costly tax fines and penalties for you
Avoiding fines that can range from £150 for a day's late submission of annual accounts to a whopping £1,500 charge for a six-month delay will help keep your company's cash balance healthier, whether you have the assistance of an accountant or not.
A Tax Accountant will assist you in expanding your business
A good accountant will strive to comprehend and become familiar with the details of your company, and will take great pride in seeing it prosper.
A Tax Accountant will address any tax concerns
Taxes are complicated! You need to prepare your company year-end accounts, prepare abbreviated company accounts (if necessary), organise your personal tax return, prepare corporation tax computations and returns, prepare VAT calculation submissions, communicate with HMRC, and deal with Companies House depending on whether you are a sole trader, limited company, or partnership.
A Tax Accountant will ensure you utilise alll of your tax deductions
It is essential all of your tax deductions are included in your tax return in order to maximise your tax deductions, therefore you must inform your accountant of all relevant information and ensure that nothing is overlooked. Unfortunately many business owners do not keep good enough financial records and without the direction of a tax accountant they are missing out on many valid tax deductions!
Here are the top tax deductions a small business owner will sometimes overlook when dealing with their own accounts and bookkeeping:
- You can deduct a portion of your living expenses, such as heat and light, mortgage interest, and council tax, if you work from home.
- You can deduct a portion of your operating expenses if you ever use your car for business. Does your accountant know about it? Even very infrequent use is worthy of a claim.
- Any asset you utilise for your business, including as computers, furniture, equipment, and vehicles, is eligible for capital allowances. A partial claim is feasible if you utilise something in both personal and professional capacities.
- Did you pay your partner, spouse, or kids for any work they performed for your company? Inform your accountant of this. Ask if it's anything you should think about doing this year if you didn't pay them last year.
- The paperwork was lost or never there. Keep trying; let your accountant know. Even if you don't have a receipt, you can still write off the expense. There are alternative ways to demonstrate that the expense actually occurred, and HMRC often does not reject legitimate claims.
- Business-related professional subscriptions are tax deductible. This rule applies to sole proprietors, business partners, directors, and other employees who cover their own subscription costs out of pocket.
- The majority of pension payments are made after deducting basic rate tax, but you must report them on your tax return to be eligible for any higher rate tax relief.
- Gift aid payments will reduce your tax liability if you are a higher rate taxpayer, but your accountant won't be aware of them unless you let them know. Remember to include admission costs for museums, zoos, and other attractions; these are frequently covered by gift aid.
As you can see the small business DIY bookkeeping mindset can see you losing out on holding onto some of your earnings if you do not keep on top of things. Choosing to hire a tax accountant is a business decision you will not regret. Investing in experts or altering how you employ them might yield significant rewards. If you're looking into greater financial assistance with your business, take a look at accountant cost factors so you can make an informed decision.
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