Are you a self-employed person or a small business owner in the UK? Then, you understand how filing your taxes can be daunting. This may bring up the question: Should you file your taxes yourself (DIY) or hire an accountant to help you?
Although both options have pros and cons, the ultimate choice will depend on your personal situation and budget. In this article, we will compare the pros and cons of both options to help you decide which best maximises your resources.
Doing-it-Yourself (DYI): The Benefits
The greatest benefit of filing your taxes yourself is saving money on accounting fees. If you hire an accountant, you may have to pay anywhere from £100 to £1000 for their service, depending on the complexity of your tax situation and the accountant’s expertise. Therefore, if you are confident in your ability to handle your taxes, you can avoid this expense and put the money into other ventures.
A second benefit of DIY is having more control over your finances and tax affairs. Moreover, filing your taxes yourself can help you learn more about the tax system and how it affects your business, helping you make better business decisions.
Doing-it-Yourself (DYI): The Drawbacks
The biggest downside of DIY tax filing is that it can be time-consuming and stressful. Depending on your income and expenses, you may have to spend days sorting through paperwork, filling tax forms, and checking for accounting errors, taking away valuable time from your core business activities.
Another drawback of DIY is that you may miss out on some tax savings or make mistakes that cost you financial losses or legal penalties. Tax laws are complex and ever-changing, so it can be difficult to keep up with all the rules and regulations applying to your situation.
For instance, you may not be privy to some tax reliefs you are entitled to or overlook some income or expenses in your report. Making such mistakes on your tax return may mean you have to pay more tax than necessary, or it could incur fines and interest charges from HMRC.
Hiring an Accountant: The Benefits
Hiring an accountant to file your taxes saves you time and hassle. With their expertise and acumen, accountants can handle all the paperwork and submissions for you, leaving you free to focus on your business and personal life. The added bonus here is that you can rely on their expertise and experience when dealing with tax issues such as audits or inquiries.
An accountant can advise you on tax essentials such as the best business structure for your SME, deductible expenses, available reliefs, and tax rebates, helping you avoid mistakes that could lead to overpaying tax or HMRC penalties.
Hire an Accountant: The Drawbacks
One of the major drawbacks of hiring an accountant is that it can be expensive. As mentioned earlier, accounting fees can vary widely depending on the accountant you choose and the services they provide. Therefore, you have to weigh the cost against the benefits and decide if it’s worth it.
Yet another disadvantage of hiring a finance professional is that you have less control over your finances and tax affairs. You have to trust that your accountant is doing a good job and acting in your best interest. Yes, most accountants take pride in their discipline and would do all within their fiduciary obligation to see you on top. However, accountants are humans, too, and you may employ a quack dealing in bad faith if your screening process isn’t meticulous enough.
Should you file your taxes yourself or hire an accountant? Both options have advantages and disadvantages, and the best option will hinge a lot on your financial situation. However, whatever option you choose, make sure you file your taxes correctly and on time, as this will save you a lot of unnecessary trouble in the long run.
Suppose you need an accountant to help you handle your taxes. In that case, Sloane Winckless accounting firm are chartered accountants Epsom & Ewell residents and businesses have relied on for professional tax advice and other financial necessities for over 30 years.